|May the source be with you, but remember the KISS principle ;-)|
|Contents||Bulletin||Scripting in shell and Perl||Network troubleshooting||History||Humor|
|News||Swimming in Fiat Currency Waters||Selected Reviews||Recommended books||Recommended Links||The Decline of the Middle Class|
|Pope Francis on danger of neoliberalism||Systemic Fraud under Clinton-Bush-Obama Regime||Neoliberalism||Invisible Hand Hypothesis||Numbers racket||Over 50 and unemployed|
|The Occupy Wall Street protest||Casino Capitalism||Notes on Republican Economic Policy||Supply Side or Trickle down economics||Critique of neoclassical economics||Lawrence Summers|
|Andrew Bacevich Views on American Exceptionalism||Principal agent problem||Short Introduction to Lysenkoism||Famous quotes of John Kenneth Galbraith||Financial Humor||Etc|
"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."
-- Abraham Lincoln
|Isn’t inequality merely the price of America being No. 1?
... That’s almost certainly false... Prior to about 20 years ago, most economists
thought that inequality greased the wheels of progress.
Inequality in America Overwhelmingly now, people who study it empirically
think that it’s sand in the wheels. ... Inequality breeds conflict,
and conflict breeds wasted resources”
From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.
Nicholas D. Kristof, NYT, November 6, 2010
Roughly 1 in 4 Americans is employed to keep fellow citizens in line and protect private wealth from would-be Robin Hoods
If labor is a commodity like any other, who is the idiot in charge of inventory management?.
As George Monbiot aptly noted Neoliberalism – the ideology at the root of all our problems ( The Guardian, April 15, 2016)
Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you'll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?
Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness , the collapse of ecosystems, rejection of the current neoliberal elite by majority of American people and the rise of candidates like Donald Trump . But we respond to these developments as if they emerge in isolation, apparently unaware that they have all been either catalyzed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?
One of the key property of neoliberalism is that it recasts inequality as virtuous. The market ensures that everyone gets what they deserve. If you deserve to die, so be it. Of cause that does not apply to the financial oligarchy which is above the law and remains unpunished even for very serious crimes. This fate is reserved for bottom 99% of population.
Neoliberalism sees competition as the defining characteristic of human relations, In other words neoliberal economic model uses "unable to compete in the labor market" label for poor people in the same way Nazi used concept of Untermensch for Slavic people.
That also mean that for those outside top 20% of population the destiny is brutal exploitation not that different then in slave societies. It victimizes and artfully creates complex of inferiority among poor people trying to brainwash that they themselves are guilty in their status and that their children do not deserve better. This is why subsidies for colleges are cut. Unfortunately now even lower middle class is coming under tremendous pressure and essentially is moved into poverty. Disappearance of well-paid middle class "white collar" jobs such as IT jobs and recently oil sector jobs and conversion of many jobs to temp or to outsourcing/off-shoring model is a fact that can't be denied. Rise in inequality in the USA for that last twenty years of neoliberalism domination is simply dramatic and medial income per family actually dropped.
Everything is moving in the direction of a pretty brutal joke: poor Americans just got a new slave-owners. And now slaves are not distinguished by the color of their skin.
The economic status of Wal Mart employees (as well as employees of many other retailers, who are predominantly women) are not that different from slaves. In "rich" states like NY and NJ Wal-Mart cashiers are paid around $9 an hour. That's around $18K a year if you can get 40hours a week (big if), You can't survive on those money living alone and renting an apartment. Two people might be able to survive if they share the apartment costs. And forget about that if you have a child (aka "single mothers" as a new face of the US poverty). You can survive only with additional social programs like food stamps. In other words the federal state subsidizes Wal-Mart, increasing their revenue at taxpayers expense.
Piketty thinks a rentier society (which is another definition of neoliberal society) contradicts the meritocratic worldview of democratic societies and is toxic for democracy as it enforces "one dollar one vote" election process (corporation buy politicians; ordinary people just legitimize with their votes pre-selected by elite candidates, see Two Party System as Polyarchy):
“…no ineluctable force standing in the way to extreme concentration of wealth…if growth slows and the return on capital increases [as] tax competition between nations heats up…Our democratic societies rest on a meritocratic worldview, or at any rate, a meritocratic hope, by which I mean a belief in a society in which inequality is based more on merit and effort than on kinship and rents. This belief and hope play a very crucial role in modern society, for a simple reason: in a democracy the professed equality of rights of all citizens contrasts sharply with the very real inequality of living conditions, and in order to overcome this contradiction it is vital to make sure that social inequalities derive from ration and universal principles rather than arbitrary contingencies. Inequalities must therefore be just and useful to all, at least in the realm of discourse and as far as possible in reality as well…Durkheim predicted that modern democratic society would not put for long with the existence of inherited wealth and would ultimately see to it that the ownership of property ended at death.” p. 422
A neo-liberal point discussed in Raymond Plant's book on neo-liberalism is that if a fortune has been made through no injustice, then it is OK. So we should not condemn the resulting distribution of wealth, as fantastically concentrated as it may be. That that's not true, as such cases always involve some level of injustice, if only by exploiting some loophole in the current laws. Piketty is correct that to the extent that citizens understood the nature of a rentier society they would rise in opposition to it. The astronomical pay of "super-managers" cannot be justified in meritocratic terms. CEO's can capture boards and force their incentive to grow faster then company profits. Manipulations with shares buyback are used to meet "targets". So neoliberal extreme is definitely bad.
At the same time we now know the equality if not achievable and communism was a pipe dream that actually inflicted cruelty on a lot of people in the name of unachievable utopia. But does this means that inequality, any level of inequality, is OK. It does not look this way and we can actually argue that extremes meet.
But collapse of the USSR lead to triumph of neoliberalism which is all about rising inequality. Under neoliberalism the wealthy and their academic servants, see inequality as a noble outcome. They want to further enrich top 1%, shrink middle class making it less secure, and impoverish poor. In other words they promote under the disguise of "free market" Newspeak a type of economy which can be called a plantation economy. In this type of the economy all the resources and power are in the hands of a wealthy planter class who then gives preference for easy jobs and the easy life to their loyal toadies. The wealthy elites like cheap labor. And it's much easier to dictate their conditions of employment when unemployment is high. Keynesian economics values the middle class and does not value unemployment or cheap labor. Neoliberals like a system that rewards them for their loyalty to the top 1% with an easier life than they otherwise merit. In a meritocracy where individuals receive public goods and services that allow them to compete on a level playing field, many neoliberal toadies would be losers who cannot compete.
In a 2005 report to investors three analysts at Citigroup advised that “the World is dividing into two blocs—the Plutonomy and the rest … In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer", or indeed the “Russian consumer”.
In other words there are analysts that believe that we are moving to a replay of Middle Ages on a new, global level, were there are only rich who do the lion share of the total consumption and poor, who does not matter.
We can also state, that under neoliberal regime the sources of American economic inequality are largely political. In other words they are the result of deliberate political decision of the US elite to shape markets in neoliberal ways, and dismantle New Deal.
Part of this "shaping the markets in neoliberal ways" was corruption of academic economists. Under neoliberalism most economists are engaged in what John Kenneth Galbraith called "the economics of innocent fraud." With the important correction that there is nothing innocent in their activities. Most of them, especially "neoclassical" economists are prostitutes for financial oligarchy. So their prescription and analysis as for the reasons of high unemployment should be taken with due skepticism.
We also know that power corrupts and absolute power corrupts absolutely. That means that existence of aristocracy might not be optimal for society "at large". But without moderating influence of the existence of the USSR on appetites of the US elite, they engage is audacious struggle for accumulation as much power and wealth as possible. In a way that situation matches the situation in 1920th, which was known to be toxic.
But society slowly but steadily moves in this direction since mid 80th. According to the official wage statistics for 2012 http://www.ssa.gov , 40% of the US work force earned less than $20,000, 53% earned less than $30,000, and 73% earned less than $50,000. The median US wage or salary was $27,519 per year. The amounts are in current dollars and they are "total" compensation amounts subject to state and federal income taxes and to Social Security and Medicare payroll taxes. In other words, the take home pay is less.
In other word the USA is now entered an inequality bubble, the bubble with the financial oligarchy as new aristocracy, which strives for absolute control of all layers of the government. The corruption has a systemic character. It take not only traditional form of the intermarriage between Wall street and DC power brokers (aka revolving doors). It also create a caste of guard labor to protect oligarchy.
Some researchers point out that neoliberal world is increasingly characterized by a three-tiered social structure(net4dem.org):
This process of stratification and fossilization of "haves" and "haves-not" is now pretty much established in the USA. The US population can be partitioned into five distinct classes, or strata:
According to figures published by the Social Security Administration in October 2011, the median income for American workers in 2010 was $26,364, just slightly above the official poverty level of $22,025 for a family of four. Most single parent families with children fall into this category. Many single earner families belong to this category too.
The median income figure reflects the fact that salaries of 50% of all workers are less then $26,364 and gives a much truer picture of the real social conditions in the United States than the more widely publicized average income, which was $39,959 in 2010. This figure is considerably higher than median income because the distribution of income is so unequal—a relative handful of ultra-high income individuals pulls up the average.
He touched upon the importance of liquidity in the financial markets... but he didn't mention liquidity of households. There is very low household consumption in China.
There is a liquidity problem in the US households. That affects credit.
and maybe household liquidity makes no difference to a currency being a safe haven. Still, if liquidity of financial markets is so important, it should also be important for households.
The liquid asset poverty rate in the US was 43.1% in 2009. What could it be now considering that the savings rate is back to below 4%?
"Liquid Asset Poverty Rate... Definition... Percentage of households without sufficient liquid assets to subsist at the poverty level for three months in the absence of income."
Here is a report on liquid asset poverty in the US...
The lower middle class... these are people in technical and lower-level management positions who work for those in the upper middle class as lower managers, craftspeople, and the like. They enjoy a reasonably comfortable standard of living, although it is constantly threatened by taxes and inflation. Generally, they have a Bachelor's and sometimes Masters college degree.
—Brian K. William, Stacy C. Sawyer and Carl M. Wahlstrom, Marriages, Families & Intimate Relationships, 2006 (Adapted from Dennis Gilbert 1997; and Joseph Kahl 1993)
There are 12 million people on the planet that had investible assets
of more than $1 million dollars. Collectively, this group controls $46.2
trillion dollars (2012). A quarter of them live in America (3.4m); followed
by almost a sixth in Japan (1.9m) and a twelfth in Germany (over 1m). China
and Great Britain round out the top 5.
Share of consumption for families outside upper middle class (with income, say, below $91K per year (80% of US households) is much less then commonly assumed. That means that in the USA consumer spending are driven by upper class and as such is pretty much isolated from decline of wages of lower 80% of population. The median household income in the United States is around $50K.
The danger of high level of inequality might be revival of nationalism and return to clan (mafia) society in the form of corporatism or even some form of national socialism. Mark S. Weine made this point in his book The Rule of the Clan. What an Ancient Form of Social Organization Reveals About the Future of Individual Freedom . From one Amazon review:
Weiner's book is more than worth its price simply as an armchair tour of interesting places and cultures and mores, deftly and briefly described. But he has a more serious and important point to make. While the social cohesion that the values of the clan promote is alluring, they are ultimately at odds with the values of individual autonomy that only the much-maligned modern liberal state can offer.
Even the state's modern defenders tend to view it, at best, as a necessary evil. It keeps the peace, upholds (somewhat) international order, and manages the complexity of modern life in ways that allow individuals to get on with their journeys of personal fulfillment.
Weiner shows (in too brief but nevertheless eloquent ways) that this reductive view of the state is insufficient to resist the seductive appeal of the clan, and that it will be for the worse if we can't find ways to combat this allure within the legal structures of modern liberalism.
Read alongside James Ault's masterful participant study of fundamentalist Baptism, Spirit and Flesh, and draw your own conclusions.
Of course the elite is worried about security of their ill-gotten gains. And that's partially why the USA need such huge totally militarized police force and outsize military. Police and military are typical guard labor, that protects private wealth of the US plutocrats. Add to this equally strong private army of security contractors.
Other suggested that not only the USA, but the global neoliberal society is deeply sick with the same disease that the US society expected in 20th (and like previously with globalism of robber barons age, the triumph of neoliberalism in 1990th was and is a global phenomenon).
High inequality logically leads to dramatic increase of guard labor and inevitable conversion of state into National Security State. Which entail total surveillance over the citizens as a defining factor. Ruling elite is always paranoid, but neoliberal elite proved to be borderline psychopathic. They do not want merely security, they want to crush all the resistance.
Butler Shaffer wrote recently that the old state system in the United States is dying before our very eyes:
A system that insists on controlling others through increasing levels of systematic violence; that loots the many for the aggrandizement of the few; that regulates any expressions of human behavior that are not of service to the rulers; that presumes the power to wage wars against any nation of its choosing, a principle that got a number of men hanged at the Nuremberg trials; and finally, criminalizes those who would speak the truth to its victims, has no moral energy remaining with which to sustain itself.
It is pretty clear that the USA became a society where there is de facto royalty. In the form of the strata which Roosevelt called "Economic royalists". Jut look at third generation of Walton family or Rocafeller family.
Remember the degenerative Soviet Politburo, or, for a change, unforgettable dyslexic President George W Bush ? The painful truth is that in the most unequal nations including the UK and the US – the intergenerational transmission of income is very strong (in plain language they have a heredity-based aristocracy). See Let them eat cake. In more equal societies such as Denmark, the tendency of privilege to breed privilege is much lower but also exists and is on the rise. As Roosevelt observed in a similar situation of 30th:
These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power.
Neoliberalism and its ideology(Randism) undermined social cohesion, making society members more hostile to each other and as such less willing to defend the country in case of real danger. Betrayal of the country is no longer an unspeakable crime.
The purpose of government should be to foster a "civil society". The slogan of the "oligarchic right" is "me first", or, as in Paul Ryan's adoration of Ayn Rand, greed is good. Objectivism became kind of new civic religion, with the goal of maximizing the wealth of a single individual at the expense of the civil society is a virtue. And those new social norms (instilled by MSM) allow the fat cats simply to stole from everybody else without fear of punishment. See an outburst from Stephen Schwarzman. If there are two societies inside of the country with bridges burned, the bottom part is less willing to spill blood for the upper part. And having a contractual army has its own set of dangers, as it spirals into high level of militarism (being in war is a new normal for the USA during the last 30 years or so), which while enriching part of the elite bankrupts the country. The quality of roads is a testament of this process.
Countervailing mechanisms and forces are destroyed. Plutocrats now can
shape the conversation by buying up newspapers and television channels as well as
funding political campaigns. The mousetrap of high inequality became irreversible
without external shocks. The more unequal our societies become, the more we all
become prisoners of that inequality. The key question is: Has our political system
been so degraded by misinformation and disinformation that it can no longer function
because it lost the touch with reality? The stream of outright falsehoods that MSM
feed the lemmings (aka society members) is clearly politically motivated. But a
side effect (externality) of all that brainwashing efforts is that nobody including
players at the top of the government now understands what's going on. Look at Obama
and Joe Biden.
As the growth of manufacturing base slowed down and return on capital dropped, the elite wants less government social spending. They wants to end popular government programs such as Social Security, no matter how much such cuts would cause economic dislocation and strains in the current social safety net. The claims are that these programs are "Waste" and could be cut without anyone, but the "moochers" noticing the effects. They use the economic strain felt by many in the economy to promote these cuts. They promise that cuts to vital programs will leave more money in the pockets of the average person. In reality, the increase in money will be marginal, but the effects on security and loss of "group purchasing power" economy of scale will make the cuts worse than worthless (Economist's View Paul Krugman Moment of Truthiness)
Two party system makes the mousetrap complete
The US system of voting (winner take all) leads inexorably to Two party system. Third parties are only spoilers. Protest votes in the current system are COUNTERPRODUCTIVE (i.e. they help the evil, not the merely bad). Deliberate and grotesque gerrymandering further dilutes protest votes.
Again, I would like to stress that rich consumers, few in number, getting the gigantic slice of income and the most of consumption (that's why the US consumption was so resilient during two last financial crises). There are the rest, the “non-rich”, accounting for surprisingly small bites of the national pie.
The question arise "Why we should care?". Most of the readers of this page are not at the bottom bracket anyway. Many are pretty high up. Here is one possible answer:
But should we care? There are two reasons we might: process and outcome.
- We might worry that the gains of the rich are ill-gotten: the result of the old-boy network, or fraud, or exploiting the largesse of the taxpayer.
- Or we might worry that the results are noxious: misery and envy, or ill-health, or dysfunctional democracy, or slow growth as the rich sit on their cash, or excessive debt and thus financial instability.
It is very difficult to understand the real situation with inequality in the USA today without experiencing long term unemployed.
Or if you forced into job of a WalMart cashier or other low paid employee. Job that does not provide a living minimum wage. You need to watch this YouTube video Wealth Inequality in America to understand the reality. The video was posted anonymously by someone using the YouTube handle politizane. It is pretty clear that not only the USA became a society where there is de facto royalty, economic royalty but also a strata of people completely deprived. An Outcaste.
And the royalty became recklessly like it should promoting to the top the likes of recovered alcoholic Bush II or "private equity shark" Romney (and remember who Romney father was).
See Over 50 and unemployed
In the current circumstances education is no longer the answer to rising inequality. Instead of serving as a social lift it, at least in some cases, became more of a social trap. This is connected with neoliberal transformation of education. With the collapse of post-war public funded educational model and privatization of the University education students face a pretty cruel world. World in which they are cows to milk. Now universities became institutions very similar to McDonalds ( or, in less politically correct terms, Bordellos of Higher Learning). Like McDonalds they need to price their services so that to receive nice profit and they to make themselves more attractive to industry they intentionally feed students with overspecialized curriculum instead of concentrating on fundamentals and the developing the ability to understand the world. Which was a hallmark of university education of the past.
Since 1970th Neo-Liberal University model replaced public funded university model (Dewey model). It is now collapsing as there are not that many students, who are able (and now with lower job prospects and tale of graduates working as bartender, willing) to pay infated tuition fees. That means that higher education again by-and-large became privilege of the rich and upper middle class.
Lower student enrollment first hit minted during dot-com boom expensive private colleges, who hunt for people with government support (such a former members of Arm forces). It remains viable only in elite universities, which traditionally serve the top 1% and rich foreigners. As David Schultz wrote in his article (Logos, 2012):
Yet the Dewey model began to collapse in middle of the 1970s. Perhaps it was the retrenchment of the SUNY and CUNY systems in New York under Governor Hugh Carey in 1976 that began the end of the democratic university. What caused its retrenchment was the fiscal crisis of the 1970s.
The fiscal crisis of the 1970s was born of numerous problems. Inflationary pressures caused by Vietnam and the energy embargoes of the 1970s, and recessionary forces from relative declines in American economic productivity produced significant economic shocks, including to the public sector where many state and local governments edged toward bankruptcy.
Efforts to relieve declining corporate profits and productivity initiated efforts to restructure the economy, including cutting back on government services. The response, first in England under Margaret Thatcher and then in the United States under Ronald Reagan, was an effort to retrench the state by a package that included decreases in government expenditures for social welfare programs, cutbacks on business regulations, resistance to labor rights, and tax cuts. Collectively these proposals are referred to as Neo-liberalism and their aim was to restore profitability and autonomy to free markets with the belief that unfettered by the government that would restore productivity.
Neo-liberalism had a major impact on higher education. First beginning under President Carter and then more so under Ronald Reagan, the federal and state governments cut taxes and public expenditures. The combination of the two meant a halt to the Dewey business model as support for public institutions decreased and federal money dried up.
From a high in the 1960s and early 70s when states and the federal government provided generous funding to expand their public systems to educate the Baby Boomers, state universities now receive only a small percentage of their money from the government. As I pointed out in my 2005 Logos “The Corporate University in American Society” article in 1991, 74% of the funding for public universities came from states, in 2004; it was down to 64%, with state systems in Illinois, Michigan and Virginia down to 25%, 18%, and 8% respectively. Since then, the percentages have shrunk even more, rendering state universities public institutions more in name than in funding.
Higher education under Neo-liberalism needed a new business model and it found it in the corporate university. The corporate university is one where colleges increasingly use corporate structures and management styles to run the university. This includes abandoning the American Association of University Professors (AAUP) shared governance model where faculty had an equal voice in the running of the school, including over curriculum, selection of department chairs, deans, and presidents, and determination of many of the other policies affecting the academy. The corporate university replaced the shared governance model with one more typical of a business corporation.
For the corporate university, many decisions, including increasingly those affecting curriculum, are determined by a top-down pyramid style of authority. University administration often composed not of typical academics but those with business or corporate backgrounds had pre-empted many of the decisions faculty used to make. Under a corporate model, the trustees, increasingly composed of more business leaders than before, select, often with minimal input from the faculty, the president who, in turn, again with minimal or no faculty voice, select the deans, department heads, and other administrative personnel.
Neoliberalism professes the idea the personal greed can serve positive society goals, which is reflected in famous neoliberal slogan "greed is good". And university presidents listen. Now presidents of neoliberal universities do not want to get $100K per year salary, they want one, or better several, million dollar salary of the CEO of major corporation (Student Debt Grows Faster at Universities With Highest-Paid Leaders, Study Finds - NYTimes.com)
At the 25 public universities with the highest-paid presidents, both student debt and the use of part-time adjunct faculty grew far faster than at the average state university from 2005 to 2012, according to a new study by the Institute for Policy Studies, a left-leaning Washington research group.
The study, “The One Percent at State U: How University Presidents Profit from Rising Student Debt and Low-Wage Faculty Labor,” examined the relationship between executive pay, student debt and low-wage faculty labor at the 25 top-paying public universities.
The co-authors, Andrew Erwin and Marjorie Wood, found that administrative expenditures at the highest-paying universities outpaced spending on scholarships by more than two to one. And while adjunct faculty members became more numerous at the 25 universities, the share of permanent faculty declined drastically.
“The high executive pay obviously isn’t the direct cause of higher student debt, or cuts in labor spending,” Ms. Wood said. “But if you think about it in terms of the allocation of resources, it does seem to be the tip of a very large iceberg, with universities that have top-heavy executive spending also having more adjuncts, more tuition increases and more administrative spending.”
... ... ...
The Chronicle of Higher Education’s annual survey of public university presidents’ compensation, also released Sunday, found that nine chief executives earned more than $1 million in total compensation in 2012-13, up from four the previous year, and three in 2010-11. The median total compensation of the 256 presidents in the survey was $478,896, a 5 percent increase over the previous year.
... ... ...
As in several past years, the highest-compensated president, at $6,057,615 in this period, was E. Gordon Gee, who resigned from Ohio State last summer amid trustee complaints about frequent gaffes. He has since become the president of West Virginia University.
This trick requires dramatic raising of tuition costs. University bureaucracy also got taste for better salaries and all those deans, etc want to be remunerated like vice presidents. So raising the tuition costs became the key existential idea of neoliberal university. Not quality of education, but tuition costs now are the key criteria of success. And if you can charge students $40K per semester it is very, very good. If does not matter that most population get less then $20 an hour.
The same is true for professors, who proved to be no less corruptible. And some of them, such as economic departments, simply serve as prostitutes for financial oligarchy. So they were corrupted even before that rat race for profit. Of course there are exceptions. But they only prove the rule.
As the result university tuition inflation outpaced inflation by leaps and bounds. At some point amount that you pay (and the level of debt after graduation) becomes an important factor in choosing the university. So children of "have" and "have nots" get into different educational institutions and do not meet each other. In a way aristocracy returned via back door.
Neoliberal university professes "deep specialization" to create "ready for the market" graduates. And that creates another problem: education became more like stock market game and that makes more difficult for you to change you specialization late in the education cycle. But early choice entail typical stock market problem: you might miss the peak of the market or worse get into prolonged slump as graduates in finance learned all too well in 2008. That's why it is important not to accumulate too much debt: this is a kind of "all in" play in poker. You essentially bet that in a particular specialty there will be open positions with high salary, when you graduate. If you lose this bet you are done.
As a result of this "reaction to the market trends" by neoliberal universities, when universities bacem appendixes of HR of large corporations students need to be more aware of real university machinery then students in 50th or 60th of the last century. And first of all assume that it is functioning not to their benefits.
One problem for a student is that there are now way too many variables that you do not control. Among them:
On the deep level neoliberal university is not interested to help you to find specialization and place in life where can unleash your talents. You are just a paying customers much like in McDonalds, and university interests are such they might try to push you in wrong direction or load you with too much debt.
If there is deep mismatch as was with computer science graduates after crash of dot-com boom, or simply bad job market due to economy stagnation and you can't find the job for your new specialty (or if you got "junk" specialty with inherent high level of unemployment among professionals) and you have substantial education debt, then waiting tables or having some other MacJob is a real disaster for you. As with such selaries you simply can't pay it back. So controlling the level of debt is very important and in this sence parents financial help is now necessary. In other words education became more and more "rich kids game".
That does not mean that university education should be avoided for those from families with modest means. On the contrary it provides unique experience and help a person to mature in multiple ways difficult to achieve without it. It is still one of the best ways to get vertical mobility. But unless parents can support you you need to try to find the most economical way to obtain it without acquiring too much debt. This is you first university exam. And if you fail it you are in trouble.
For example, computer science education is a great way to learn quite a few things necessary for a modern life. But the price does matter and prestige of the university institution that you attend is just one of the factors you should consider in your evaluation. It should not be the major factor ("vanity fair") unless your parents are rich and can support you. If you are good you can get later a master degree in a prestigious university after graduation from a regular college. Or even Ph.D.
County colleges are greatly underappreciated and generally provide pretty high standard of education, giving ability to students to save money for the first two years before transferring to a four year college. They also smooth the transition as finding yourself among people who are only equal or superior then you (and have access to financial respource that you don't have) is a huge stress. The proverb say that it is better to be first in the village then last in the town has some truth in it. Prestigious universities might provide a career boost (high fly companies usually accept resumes only from Ivy League members), but they cost so much that you need to be a son or daughter of well-to-do parents to feel comfortably in them. Or extremely talented. Also amount of career boost that elite universities provide depends on whom your parents are and what connections they have. It does not depend solely on you and the university. Again, I would like to stress that you should resist "vanity fair" approach to your education: a much better way is to try to obtain BS in a regular university and them try to obtain MS and then, if you are good, PHD, in a prestigious university. Here is a fragment of an interesting discussion that covers this topic (Low Mobility Is Not a Social Tragedy?, Feb 13, 2013 ; I recommend you to read the whole discussion ):
I would like to defend Greg Clack.
I think that Greg Clack point is that the number of gifted children is limited and that exceptionally gifted children have some chance for upper move in almost all, even the most hierarchical societies (story of Alexander Hamilton was really fascinating for me, the story of Mikhail Lomonosov http://en.wikipedia.org/wiki/Mikhail_Lomonosov was another one -- he went from the very bottom to the top of Russian aristocracy just on the strength of his abilities as a scientist). In no way the ability to "hold its own" (typical for rich families kids) against which many here expressed some resentment represents social mobility. But the number of kids who went down is low -- that's actually proves Greg Clack point:
(1) Studies of social mobility using surnames suggest two things. Social mobility rates are much lower than conventionally estimated. And social mobility rates estimated in this way vary little across societies and time periods. Sweden is no more mobile than contemporary England and the USA, or even than medieval England. Social mobility rates seem to be independent of social institutions (see the other studies on China, India, Japan and the USA now linked here).
Francisco Ferreira rejects this interpretation, and restates the idea that there is a strong link between social mobility rates and inequality in his interesting post.
What is wrong with the data Ferreira cites? Conventional estimates of social mobility, which look at just single aspects of social status such as income, are contaminated by noise. If we measure mobility on one aspect of status such as income, it will seem rapid.
But this is because income is a very noisy measure of the underlying status of families. The status of families is a combination of their education, occupation, income, wealth, health, and residence. They will often trade off income for some other aspect of status such as occupation. A child can be as socially successful as a low paid philosophy professor as a high paid car salesman. Thus if we measure just one aspect of status such as income we are going to confuse the random fluctuations of income across generations, influenced by such things as career choices between business and philosophy, with true generalised social mobility.
If these estimates of social mobility were anywhere near correct as indicating true underlying rates of social mobility, then we would not find that the aristocrats of 1700 in Sweden are still overrepresented in all elite occupations of Sweden. Further, the more equal is income in a society, the less signal will income give of the true social status of families. In a society such as Sweden, where the difference in income between bus drivers and philosophy professors is modest, income tells us little about the social status of families. It is contaminated much more by random noise. Thus it will appear if we measure social status just by income that mobility is much greater in Sweden than in the USA, because in the USA income is a much better indicator of the true overall status of families.
The last two paragraphs of Greg Clark article cited by Mark Thoma are badly written and actually are somewhat disconnected with his line of thinking as I understand it as well as with the general line of argumentation of the paper.
Again, I would like to stress that a low intergenerational mobility includes the ability of kids with silver spoon in their mouth to keep a status close to their parent. The fact that they a have different starting point then kids from lower strata of society does not change that.
I think that the key argument that needs testing is that the number of challengers from lower strata of the society is always pretty low and is to a large extent accommodated by the societies we know (of course some societies are better then others).
Actually it would be interesting to look at the social mobility data of the USSR from this point of view.
But in no way, say, Mark Thoma was a regular kid, although circumstances for vertical mobility at this time were definitely better then now. He did possessed some qualities which made possible his upward move although his choice of economics was probably a mistake ;-).
Whether those qualities were enough in more restrictive environments we simply don't know, but circumstances for him were difficult enough as they were.
EC -> kievite...kievite -> EC...
"the number of gifted children is limited"
I stopped reading after that. I teach at a high school in a town with a real mix of highly elite families, working class families, and poor families, and I can tell you that the children of affluent parents are not obviously more gifted than the children of poor families. They do, however, have a lot more social capital, and they have vastly more success. But the limitations on being "gifted" are irrelevant.
According to an extensive study (Turkheimer et al., 2003) of 50,000 pregnant women and the children they went on to have (including enough sets of twins to be able to study the role of innate genetic differences), variation in IQ among the affluent seems to be largely genetic.
Among the poor, however, IQ has very little to do with genes -- probably because the genetic differences are swamped and suppressed by the environmental differences, as few poor kids are able to develop as fully as they would in less constrained circumstances.
All you said is true. I completely agree that "...few poor kids are able to develop as fully as they would in less constrained circumstances." So there are losses here and we should openly talk about them.
Also it goes without saying that social capital is extremely important for a child. That's why downward mobility of children from upper classes is suppressed, despite the fact that some of them are plain vanilla stupid.
But how this disproves the point made that "exceptionally gifted children have some chance for upper move in almost all, even the most hierarchical societies"? I think you just jumped the gun...
The early boomers benefitted from the happy confluence of the postwar boom, LBJ's Great Society efforts toward financial assistance for those seeking to advance their educations, and the 1964 Civil Rights Act which opened opportunities for marginalized social groups in institutions largely closed to them under the prewar social customs in the US.
The US Supreme Court is made up of only Jews and Catholics as of this writing, a circumstance inconceivable in the prewar America. Catholics were largely relegated to separate and unequal institutions. Jews' opportunities were limited by quotas and had a separate set of institutions of their own where their numbers could support such. Where their numbers were not sufficient, they were often relegated to second rate institutions.
Jewish doctors frequently became the leading men in the Catholic hospitals in Midwestern industrial towns where they were unwelcome in the towns' main hospitals. Schools, clubs, hospitals, professional and commercial organizations often had quota or exclusionary policies. Meritocracy has its drawbacks, but we've seen worse in living memory.
College textbook publishing became a racket with the growth of neoliberalism. That means at least since 1980. And it is pretty dirty racket with willing accomplishes in form of so called professors like Greg Mankiw. For instance, you can find a used 5th edition Mankiw introductory to Microeconomics for under $4.00, while a new 7th edition costs over $200. An interesting discussion of this problem can be found at Thoughts on High-Priced Textbooks'
See Slightly Skeptical View on University Education
As Jesse aptly noted at his blog post Echoes of the Past In The Economist - The Return of the Übermenschen the US oligarchy never was so audacious.
And it is as isolated as the aristocracies of bygone days, isolation reinforced by newly minted royalty withdrawal into gated estates, Ivy League Universities, and private planes.
They are not openly suggesting that no child should rise above the status of parents, presumably in terms of wealth, education, and opportunity. But their policies are directed toward this goal. If you are born to poor parents in the USA, all bets are off -- your success is highly unlikely, and your servile status, if not poverty is supposedly pre-destined by poor generic material that you got.
This is of course not because the children of the elite inherit the talent, energy, drive, and resilience to overcome the many obstacles they will face in life from their parents. Whatever abilities they have (and regression to the mean is applicable to royalty children too), they are greatly supplemented, of course, by the easy opportunities, valuable connections, and access to power. That's why the result of SAT in the USA so strongly correlated with the wealth of parents. And a virtual freedom from prosecution does not hurt either, in case they have inherited a penchant for sociopathy, or something worse, along with their many gifts.
The view that the children of the poor will not do well, because they are genetically inferior became kind of hidden agenda. These are the pesky 99% just deserve to be cheated and robbed by the elite, because of the inherent superiority of the top one percent. There is no fraud in the system, only good and bad breeding, natural predators and prey.
This line of thinking rests on the assumption that I succeed, therefore I am. And if you do not, well, so be it. You will be low-paid office slave or waiter in McDonalds with a college diploma as it is necessary for the maximization of profits of the elite. There is no space at the top for everybody. Enjoy the ride... Here is an typical expression of such views:
"Many commentators automatically assume that low intergenerational mobility rates represent a social tragedy. I do not understand this reflexive wailing and beating of breasts in response to the finding of slow mobility rates.
The fact that the social competence of children is highly predictable once we know the status of their parents, grandparents and great-grandparents is not a threat to the American Way of Life and the ideals of the open society
The children of earlier elites will not succeed because they are born with a silver spoon in their mouth, and an automatic ticket to the Ivy League.
They will succeed because they have inherited the talent, energy, drive, and resilience to overcome the many obstacles they will face in life. Life is still a struggle for all who hope to have economic and social success. It is just that we can predict who will be likely to possess the necessary characteristics from their ancestry."
Greg Clark, The Economist, 13 Feb. 2013
Mr. Clark is now a professor of economics and was the department chair until 2013 at the University of California, Davis. His areas of research are long term economic growth, the wealth of nations, and the economic history of England and India.
And another one:
"During this time, a growing professional class believed that scientific progress could be used to cure all social ills, and many educated people accepted that humans, like all animals, were subject to natural selection.
Darwinian evolution viewed humans as a flawed species that required pruning to maintain its health. Therefore negative eugenics seemed to offer a rational solution to certain age-old social problems."
David Micklos, Elof Carlson, Engineering American Society: The Lesson of Eugenics
If we compare this like of thinking with the thinking of eightieth century and you will see that the progress is really limited:
“With savages, the weak in body or mind are soon eliminated; and those that survive commonly exhibit a vigorous state of health. We civilized men, on the other hand, do our utmost to check the process of elimination; we build asylums for the imbecile, the maimed, and the sick; we institute poor-laws; and our medical men exert their utmost skill to save the life of every one to the last moment.
There is reason to believe that vaccination has preserved thousands, who from a weak constitution would formerly have succumbed to small-pox. Thus the weak members of civilised societies propagate their kind. No one who has attended to the breeding of domestic animals will doubt that this must be highly injurious to the race of man.
It is surprising how soon a want of care, or care wrongly directed, leads to the degeneration of a domestic race; but excepting in the case of man himself, hardly any one is so ignorant as to allow his worst animals to breed.
The aid which we feel impelled to give to the helpless is mainly an incidental result of the instinct of sympathy, which was originally acquired as part of the social instincts, but subsequently rendered, in the manner previously indicated, more tender and more widely diffused. Nor could we check our sympathy, if so urged by hard reason, without deterioration in the noblest part of our nature. The surgeon may harden himself whilst performing an operation, for he knows that he is acting for the good of his patient; but if we were intentionally to neglect the weak and helpless, it could only be for a contingent benefit, with a certain and great present evil.
Hence we must bear without complaining the undoubtedly bad effects of the weak surviving and propagating their kind; but there appears to be at least one check in steady action, namely the weaker and inferior members of society not marrying so freely as the sound; and this check might be indefinitely increased, though this is more to be hoped for than expected, by the weak in body or mind refraining from marriage.”
Charles Darwin, The Descent of Man
So all this screams of MSM about dropping consumer spending is just a smoke screen. In oligarchic republic which USA represents, consumption is heavily shifted to top 20% and as such is much less dependent of the conditions of the economy. And top 20% can afford $8 per gallon gas (European price) without any problems.
|John Barkley Rosser, Jr. With Marina V. Rosser and Ehsan Ahmed, argued for a two-way positive link between income inequality (economic inequality) and the size of an underground economy in a nation (Rosser, Rosser, and Ahmed, 2000).|
Globally in 2005, top fifth (20%) of the world accounted for 76.6% of total private consumption (20:80 Pareto rule). The poorest fifth just 1.5%. I do not think the USA differs that much from the rest of the world.
There was two famous Citigroup Plutonomy research reports (2005 and 2006) featured in in Capitalism: A Love Story . Here is how Yves Smith summarized the findings (in her post High Income Disparity Leads to Low Savings Rates)
On the one hand, the authors, Ajay Kapur, Niall Macleod, and Narendra Singh get some credit for addressing a topic surprisingly ignored by mainstream economists. There have been some noteworthy efforts to measure the increase in concentration of income and wealth in the US most notably by Thomas Piketty and Edmund Saez. But while there have been some efforts to dispute their findings (that the rich, particularly the top 1%, have gotten relatively MUCH richer in the last 20 years), for the most part discussions of what to make of it (as least in the US) have rapidly descended into theological debates. One camp laments the fall in economic mobility (a predictable side effect), the corrosive impact of perceived unfairness, and the public health costs (even the richest in high income disparity countries suffer from shortened life spans). The other camp tends to focus on the Darwinian aspects, that rising income disparity is the result of a vibrant, open economy, and the higher growth rates that allegedly result will lift help all workers.
Yet as far as I can tell, there has been virtually no discussion of the macroeconomy effects of rising income and wealth disparities, or to look into what the implications for investment strategies might be. One interesting effect is that with rising inequality the share of "guard labor" grows very quickly and that puts an upper limit on the further growth of inequality (half of the citizens cannot be guards protecting few billionaires from the other half).
Now the fact that the Citi team asked a worthwhile question does not mean they came up with a sound answer. In fact, he reports are almost ludicrously funny in the way they attempt to depict what they call plutonomy as not merely a tradeable trend (as in leading to some useful investment ideas), but as a Brave New Economy development. I haven't recalled such Panglossian prose since the most delirious days of the dot-com bubble:
We will posit that:
1) the world is dividing into two blocs – the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S.
What are the common drivers of Plutonomy? Disruptive technology-driven productivity gains, creative financial innovation, capitalist-friendly cooperative governments, an international dimension of immigrants and overseas conquests invigorating wealth creation, the rule of law, and patenting inventions. Often these wealth waves involve great complexity, exploited best by the rich and educated of the time…..Most “Global Imbalances” (high current account deficits and low savings rates, high consumer debt levels in the Anglo-Saxon world, etc) that continue to (unprofitably) preoccupy the world’s intelligentsia look a lot less threatening when examined through the prism of plutonomy. The risk premium on equities that might derive from the dyspeptic “global imbalance” school is unwarranted – the earth is not going to be shaken off its axis, and sucked into the cosmos by these “imbalances”. The earth is being held up by the muscular arms of its entrepreneur-plutocrats, like it, or not..
Yves here. Translation: plutonomy is such a great thing that the entire stock market would be valued higher if everyone understood it. And the hoops the reports go through to defend it are impressive. The plutomony countries (the notorious Anglo-Saxon model, the US, UK, Canada and Australia) even have unusually risk-seeking populations (and that is a Good Thing):
…a new, rather out-of-the box hypothesis suggests that dopamine differentials can explain differences in risk-taking between societies. John Mauldin, the author of “Bulls-Eye Investing” in an email last month cited this work. The thesis: Dopamine, a pleasure-inducing brain chemical, is linked with curiosity, adventure, entrepreneurship, and helps drive results in uncertain environments. Populations generally have about 2% of their members with high enough dopamine levels with the curiosity to emigrate. Ergo, immigrant nations like the U.S. and Canada, and increasingly the UK, have high dopamine-intensity populations.
Yves here. What happened to “Give me your tired, your poor/Your huddled masses yearning to breathe free/The wretched refuse of your teeming shore”? Were the Puritans a high dopamine population? Doubtful. How about the Irish emigration to the US, which peaked during its great famine?
Despite a good deal of romanticization standing in for analysis, the report does have one intriguing, and well documented finding: that the plutonomies have low savings rates. Consider an fictional pep rally chant:
We’re from Greenwich
Living off our income
Never touch the principal
Think about that. If you are rich, you can afford to spend all your income. You don’t need to save, because your existing wealth provides you with a more than sufficient cushion.
The ramifications when you have a high wealth concentration are profound. From the October 2005 report:
In a plutonomy, the rich drop their savings rate, consume a larger fraction of their bloated, very large share of the economy. This behavior overshadows the decisions of everybody else. The behavior of the exceptionally rich drives the national numbers – the “appallingly low” overall savings rates, the “over-extended consumer”, and the “unsustainable” current accounts that accompany this phenomenon….
Feeling wealthier, the rich decide to consume a part of their capital gains right away. In other words, they save less from their income, the wellknown wealth effect. The key point though is that this new lower savings rate is applied to their newer massive income. Remember they got a much bigger chunk of the economy, that’s how it became a plutonomy. The consequent decline in absolute savings for them (and the country) is huge when this happens. They just account for too large a part of the national economy; even a small fall in their savings rate overwhelms the decisions of all the rest.
Yves here. This account rather cheerily dismisses the notion that there might be overextended consumers on the other end of the food chain. Unprecedented credit card delinquencies and mortgage defaults suggest otherwise. But behaviors on both ends of the income spectrum no doubt played into the low-savings dynamic: wealthy who spend heavily, and struggling average consumers who increasingly came to rely on borrowings to improve or merely maintain their lifestyle. And let us not forget: were encouraged to monetize their home equity, so they actually aped the behavior of their betters, treating appreciated assets as savings. Before you chide people who did that as profligate (naive might be a better characterization), recall that no one less than Ben Bernanke was untroubled by rising consumer debt levels because they also showed rising asset levels. Bernanke ignored the fact that debt needs to be serviced out of incomes, and households for the most part were not borrowing to acquire income-producing assets. So unless the rising tide of consumer debt was matched by rising incomes, this process was bound to come to an ugly end.
Also under Bush country definitely moved from oligarchy to plutocracy. Bush openly claimed that "have more" is his base. The top 1% of earners have captured four-fifths of all new income.
An interesting question is whether the extremely unequal income distribution like we have now make the broader society unstable. Or plebs is satisfied with "Bread and circuses" (aka house, SUV, boat, Daytona 500 and 500 channels on cable) as long as loot from the other parts of the world is still coming...
Martin Bento in his response to Risk Pollution, Market Failure & Social Justice — Crooked Timber made the following point:
Donald made a point I was going to. I would go a bit further though. It’s not clear to me that economic inequality is not desired for its own sake by the some of the elite. After all, studies suggest that once you get past the level of income needed for a reasonably comfortable life – about $40K for a single person in the US - the quest for money is mostly about status.
Meeting your needs is not necessarily zero sum, but status is: my status can only be higher than yours to the extent that yours is lower than mine.
The more inequality there is, the more status differentiation there is. Of course, there are other sources of status than money, but I’m talking specifically about people who value money for the status it confers. This is in addition to the “Donner Party Conservatism” calls to make sure the incentives to work are as strong as possible (to be fair, I think tolerating some inequality for the sake of incentives is worthwhile, but we seem to be well beyond that).
For example currently the USA is No.3 in Gini measured inequality (cyeahoo, Oct 16, 2009), but still the society is reasonably stable:
Gini score: 40.8
GDP 2007 (US$ billions): 13,751.4
Share of income or expenditure (%)
Poorest 10%: 1.9
Richest 10%: 29.9
Ratio of income or expenditure, share of top 10% to lowest 10%: 15.9
What is really surprising is how low the average American salary is: just $26,352 or ~$2,200 a month. This is equal approximately to $13 an hour.
At the same time:
Now about top 400:
Here are some interesting hypothesis about affect of inequality of the society:
At some point the anger creates destructive tendencies in society that are
self-sustainable no matter what police force is available for the state (like
nationalistic forces that blow out the USSR). In the meantime society experiences
apathy and decline in all societal dimensions (mass alcoholism and hidden opposition
to any productivity rising initiatives in the USSR). At the same time ruling
elite became less and less intellectually astute ( dominated by gerontocrats
in the USSR) and at some point pretty detached from reality ("let them eat cake").
Higher inequality is somewhat connected with imperial outreach. As Kevin de Bruxelles noted in comment to What collapsing empire looks like - Glenn Greenwald - Salon.com
I’m surprised a thoughtful guy like Glenn Greenwald would make such an unsubstantiated link between collapsing public services for American peasants and a collapse of America’s global (indirect) imperial realm. Is there really a historic link between the quality of a nation’s services to its citizens and its global power? If so the Scandinavian countries would have been ruling the world for the past fifty years. If anything there is probably a reverse correlation. None of the great historic imperial powers, such as the British, Roman, Spanish, Russian, Ottoman, Mongolian, Chinese, Islamic, or Persian, were associated with egalitarian living conditions for anyone outside of the elite. So from a historic point of view, the ability to divert resources away from the peasants and towards the national security state is a sign of elite power and should be seen as a sign increased American imperial potential.
Now if America’s global power was still based on economic production then an argument could be made that closing libraries and cancelling the 12th grade would lower America’s power potential. But as we all know that is no longer the case and now America’s power is as the global consumer of excess production. Will a dumber peasantry consume even more? I think there is a good chance that the answer is yes.
Now a limit could be reached to how far the elite can lower their peasant’s standard of living if these changes actually resulted in civil disorder that demanded much energy for American elites to quell. But so far that is far from the case. Even a facile gesture such as voting for any other political party except the ruling Republicrats seems like a bridge too far for 95% of the peasants to attempt. No, the sad truth is that American elites, thanks to their exceptional ability to deliver an ever increasing amount of diverting bread and circuses, have plenty of room to further cut standards of living and are nowhere near reaching any limits.
What the reductions in economic and educational options will result in are higher quality volunteers into America’s security machinery, which again obviously raise America’s global power potential. This, along with an increasingly ruthless elite, should assure that into the medium term America’s powerful position will remain unchallenged. If one colors in blue on a world map all the countries under de facto indirect US control then one will start to realize the extent of US power. The only major countries outside of US control are Iran, North Korea, Syria, Cuba, and Venezuela. Iraq and Afghanistan are recent converts to the blue column but it far from certain whether they will stay that way. American elites will resist to the bitter end any country falling from the blue category. But this colored world map is the best metric for judging US global power.
In the end it’s just wishful thinking to link the declining of the American peasant’s standard of living with a declining of the American elite’s global power. I wouldn’t be surprised to see this proven in an attack on Iran in the near future.
Higher pay inequality feeds organized crime (and here we assume that banksters are different from the organized crime, which is probably a very weak hypothesis ;-). That's why Peter Drucker was probably right. He thought that top execs shouldn't get more than 25 times the average salary in the company (which would cap it around $2 millions). I would suggest a metric based on multiple from the average of lower 50% full time jobs for a particular firm (for example in Wal Mart that would cashers and cleaners, people who are living in Latin American style poverty, if they are single mothers as many are). One of the particular strengths of the idea of the maximum wage base on average of lower 50% of salaries is that if senior managers want to increase their own pay, they have to increase that of the lower-paid employees too.
And in a way financial industry itself became an organized crime. The notion of exorbitant wages prevalent in financial industry (and, before it, pioneered by in high-tech companies during dot-com boom via stock options) is based on the idea that some people are at least hundred times more productive then the others. In some professions like programming this is true and such people do exists. But any sufficiently large company is about team work. No matter what job a person does and no matter how many hours they work, there is no possible way that an single individual will create a whole product. It's a team effort. That means that neither skill nor expertise or intelligence can justify the payment of 200, 300 or even 400 times the wages of the lowest-paid 20% workers in any large organization.
This is especially questionable for financial professionals because by and large they are engaged in non-productive. often harmful for the society as whole redistribution activities, the same activities that organized crime performs. Moreover, modern traders are actually play a tremendously destructive role as subprime crisis (and before it saving and loans debacle) aptly demonstrated. which make them indistinguishable in this societal roles from cocaine pushers on the streets.
Drucker's views on the subject are probably worth revisiting. Rick Wartzman wrote in his Business Week article Put a Cap on CEO Pay' that "those who understand that what comes with their authority is the weight of responsibility, not "the mantle of privilege," as writer and editor Thomas Stewart described Drucker's view. It's their job "to do what is right for the enterprise—not for shareholders alone, and certainly not for themselves alone."Large pay also attracts sociopathic personalities. Sociopathic personalities at the top of modern organizations is another important but rarely discussed danger.
"I'm not talking about the bitter feelings of the people on the plant floor," Drucker told a reporter in 2004. "They're convinced that their bosses are crooks anyway. It's the mid-level management that is incredibly disillusioned" by CEO compensation that seems to have no bounds. " This is especially true, Drucker explained in an earlier interview, when CEOs pocket huge sums while laying off workers. That kind of action, he said, is "morally unforgivable." There can be exceptions but they should be in middle management not in top management ranks.
Put it all together, and the picture became really discouraging. We have an ill-informed or misinformed electorate, politicians who gleefully add to the misinformation, watchdogs who are afraid to bark and guards on each and every corner. Mousetrap is complete.
Henry J. Farrell
Transforming American politics, September 16, 2010
This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover) This is a transformative book. It's the best book on American politics that I've read since Rick Perlstein's Before the Storm. Not all of it is original (the authors seek to synthesize others' work as well as present their own, but provide due credit where credit is due). Not all of its arguments are fully supported (the authors provide a strong circumstantial case to support their argument, but don't have smoking gun evidence on many of the relevant causal relations). But it should transform the ways in which we think about and debate the political economy of the US.
The underlying argument is straightforward. The sources of American economic inequality are largely political - the result of deliberate political decisions to shape markets in ways that benefit the already-privileged at the expense of a more-or-less unaware public. The authors weave a historical narrative which Kevin Drum (who says the same things that I am saying about the book's importance) summarizes cogently here. This is not necessarily original - a lot of leftwing and left-of-center writers have been making similar claims for a long time. What is new is both the specific evidence that the authors use, and their conscious and deliberate effort to reframe what is important about American politics.
First - the evidence. Hacker and Pierson draw on work by economists like Picketty and Saez on the substantial growth in US inequality (and on comparisons between the US and other countries), but argue that many of the explanations preferred by economists (the effects of technological change on demand for skills) simply don't explain what is going on. First, they do not explain why inequality is so top-heavy - that is, why so many of the economic benefits go to a tiny, tiny minority of individuals among those with apparently similar skills. Second, they do not explain cross national variation - why the differences in the level of inequality among advanced industrialized countries, all of which have gone through more-or-less similar technological shocks, are so stark. While Hacker and Pierson agree that technological change is part of the story, they suggest that the ways in which this is channeled in different national contexts is crucial. And it is here that politics plays a key role.
Many economists are skeptical that politics explains the outcome, suggesting that conventional forms of political intervention are not big enough to have such dramatic consequences. Hacker and Pierson's reply implicitly points to a blind spot of many economists - they argue that markets are not `natural,' but instead are constituted by government policy and political institutions. If institutions are designed one way, they result in one form of market activity, whereas if they are designed another way, they will result in very different outcomes. Hence, results that appear like `natural' market operations to a neo-classical economist may in fact be the result of political decisions, or indeed of deliberate political inaction. Hacker and Pierson cite e.g. the decision of the Clinton administration not to police derivatives as an example of how political coalitions may block reforms in ways that have dramatic economic consequences.
Hence, Hacker and Pierson turn to the lessons of ongoing political science research. This is both a strength and a weakness. I'll talk about the weakness below - but I found the account of the current research convincing, readable and accurate. It builds on both Hacker and Pierson's own work and the work of others (e.g. the revisionist account of American party structures from Zaller et al. and the work of Bartels). This original body of work is not written in ways that make it easily accessible to non-professionals - while Bartels' book was both excellent and influential, it was not an easy read. Winner-Take-All Politics pulls off the tricky task of both presenting the key arguments underlying work without distorting them and integrating them into a highly readable narrative.
As noted above, the book sets out (in my view quite successfully) to reframe how we should think about American politics. It downplays the importance of electoral politics, without dismissing it, in favor of a focus on policy-setting, institutions, and organization.
- First and most important - policy-setting. Hacker and Pierson argue that too many books on US politics focus on the electoral circus. Instead, they should be focusing on the politics of policy-setting. Government is important, after all, because it makes policy decisions which affect people's lives. While elections clearly play an important role in determining who can set policy, they are not the only moment of policy choice, nor necessarily the most important. The actual processes through which policy gets made are poorly understood by the public, in part because the media is not interested in them (in Hacker and Pierson's words, "[f]or the media, governing often seems like something that happens in the off-season").
- And to understand the actual processes of policy-making, we need to understand institutions. Institutions make it more or less easy to get policy through the system, by shaping veto points. If one wants to explain why inequality happens, one needs to look not only at the decisions which are made, but the decisions which are not made, because they are successfully opposed by parties or interest groups. Institutional rules provide actors with opportunities both to try and get policies that they want through the system and to stymie policies that they do not want to see enacted. Most obviously in the current administration, the existence of the filibuster supermajority requirement, and the willingness of the Republican party to use it for every significant piece of legislation that it can be applied to means that we are seeing policy change through "drift." Over time, policies become increasingly disconnected from their original purposes, or actors find loopholes or ambiguities through which they can subvert the intention of a policy (for example - the favorable tax regime under which hedge fund managers are able to treat their income at a low tax rate). If it is impossible to rectify policies to deal with these problems, then drift leads to policy change - Hacker and Pierson suggest that it is one of the most important forms of such change in the US.
- Finally - the role of organizations. Hacker and Pierson suggest that organizations play a key role in pushing through policy change (and a very important role in elections too). They typically trump voters (who lack information, are myopic, are not focused on the long term) in shaping policy decisions. Here, it is important that the organizational landscape of the US is dramatically skewed. There are many very influential organizations pushing the interests of business and of the rich. Politicians on both sides tend to pay a lot of attention to them, because of the resources that they have. There are far fewer - and weaker - organizations on the other side of the fight, especially given the continuing decline of unions (which has been hastened by policy decisions taken and not taken by Republicans and conservative Democrats).
In Hacker and Pierson's account, these three together account for the systematic political bias towards greater inequality. In simplified form: Organizations - and battles between organizations over policy as well as elections - are the structuring conflicts of American politics. The interests of the rich are represented by far more powerful organizations than the interests of the poor and middle class. The institutions of the US provide these organizations and their political allies with a variety of tools to promote new policies that reshape markets in their interests. This account is in some ways neo-Galbraithian (Hacker and Pierson refer in passing to the notion of `countervailing powers'). But while it lacks Galbraith's magisterial and mellifluous prose style, it is much better than he was on the details.
Even so (and here begin the criticisms) - it is not detailed enough. The authors set the book up as a whodunit: Who or what is responsible for the gross inequalities of American economic life? They show that the other major suspects have decent alibis (they may inadvertently have helped the culprit, but they did not carry out the crime itself. They show that their preferred culprit had the motive and, apparently, the means. They find good circumstantial evidence that he did it. But they do not find a smoking gun. For me, the culprit (the American political system) is like OJ. As matters stand, I'm pretty sure that he committed the crime. But I'm not sure that he could be convicted in a court of law, and I could be convinced that I was wrong, if major new exculpatory evidence was uncovered.
The lack of any smoking gun (or, alternatively, good evidence against a smoking gun) is the direct result of a major failure of American intellectual life. As the authors observe elsewhere, there is no field of American political economy. Economists have typically treated the economy as non-political. Political scientists have typically not concerned themselves with the American economy. There are recent efforts to change this, coming from economists like Paul Krugman and political scientists like Larry Bartels, but they are still in their infancy. We do not have the kinds of detailed and systematic accounts of the relationship between political institutions and economic order for the US that we have e.g. for most mainland European countries. We will need a decade or more of research to build the foundations of one.
Hence, while Hacker and Pierson show that political science can get us a large part of the way, it cannot get us as far as they would like us to go, for the simple reason that political science is not well developed enough yet. We can identify the causal mechanisms intervening between some specific political decisions and non-decisions and observed outcomes in the economy. We cannot yet provide a really satisfactory account of how these particular mechanisms work across a wider variety of settings and hence produce the general forms of inequality that they point to. Nor do we yet have a really good account of the precise interactions between these mechanisms and other mechanisms.
None of this is to discount the importance of this book. If it has the impact it deserves, it will transform American public arguments about politics and policymaking. I cannot see how someone who was fair minded could come away from reading this book and not be convinced that politics plays a key role in the enormous economic inequality that we see. And even if it is aimed at a general audience, it also challenges academics and researchers in economics, political science and economic sociology both to re-examine their assumptions about how economics and politics work, and to figure out ways better to engage with the key political debates of our time as Hacker and Pierson have done. If you can, buy it.
Great Faulkner's Ghost (Washington, DC)
This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover) Many people have observed that American politics and the American economy reached some kind of turning point around 1980, which conveniently marks the election of Ronald Reagan. Some also pointed to other factors such as the deregulation of stock brokerage commissions in 1975 and the high inflation of the 1970s. Other analysts have put the turning point back in 1968, when Richard Nixon became President on the back of a wave of white, middle-class resentment against the 1960s. Hacker and Pierson, however, point the finger at the 1970s. As they describe in Chapter 4, the Nixon presidency saw the high-water market of the regulatory state; the demise of traditional liberalism occurred during the Carter administration, despite Democratic control of Washington, when highly organized business interests were able to torpedo the Democratic agenda and begin the era of cutting taxes for the rich that apparently has not yet ended today.
Why then? Not, as popular commentary would have it, because public opinion shifted. Hacker and Pierson cite studies showing that public opinion on issues such as inequality has not shifted over the past thirty years; most people still think society is too unequal and that taxes should be used to reduce inequality. What has shifted is that Congressmen are now much more receptive to the opinions of the rich, and there is actually a negative correlation between their positions and the preferences of their poor constituents (p. 111). Citing Martin Gilens, they write, "When well-off people strongly supported a policy change, it had almost three times the chance of becoming law as when they strongly opposed it. When median-income people strongly supported a policy change, it had hardly any greater chance of becoming law than when they strongly opposed it" (p. 112). In other words, it isn't public opinion, or the median voter, that matters; it's what the rich want.
That shift occurred in the 1970s because businesses and the super-rich began a process of political organization in the early 1970s that enabled them to pool their wealth and contacts to achieve dominant political influence (described in Chapter 5). To take one of the many statistics they provide, the number of companies with registered lobbyists in Washington grew from 175 in 1971 to nearly 2,500 in 1982 (p. 118). Money pouring into lobbying firms, political campaigns, and ideological think tanks created the organizational muscle that gave the Republicans a formidable institutional advantage by the 1980s. The Democrats have only reduced that advantage in the past two decades by becoming more like Republicans-more business-friendly, more anti-tax, and more dependent on money from the super-rich. And that dependency has severely limited both their ability and their desire to fight back on behalf of the middle class (let alone the poor), which has few defenders in Washington.
At a high level, the lesson of Winner-Take-All Politics is similar to that of 13 Bankers: when looking at economic phenomena, be they the financial crisis or the vast increase in inequality of the past thirty years, it's politics that matters, not just abstract economic forces. One of the singular victories of the rich has been convincing the rest of us that their disproportionate success has been due to abstract economic forces beyond anyone's control (technology, globalization, etc.), not old-fashioned power politics. Hopefully the financial crisis and the recession that has ended only on paper (if that) will provide the opportunity to teach people that there is no such thing as abstract economic forces; instead, there are different groups using the political system to fight for larger shares of society's wealth. And one group has been winning for over thirty years.
Citizen John (USA)Michael Emmett Brady "mandmbrady" (Bellflower, California ,United States)
In Winner-Take-All Politics, two political science professors explain what caused the Middle Class to become vulnerable. Understanding this phenomenon is the Holy Grail of contemporary economics in the U.S.
Some may feel this book is just as polarizing as the current state of politics and media in America. The decades-long decline in income taxes of wealthy individuals is cited in detail. Wage earners are usually subjected to the FICA taxes against all their ordinary income (all or almost their entire total income). But the top wealthy Americans may have only a small percentage (or none) of their income subjected to FICA taxes. Thus Warren Buffett announced that he pays a lower tax rate than his secretary. Buffett has cited income inequality for "poisoning democracy."
When you search the Net for Buffett quotes on inequality, you get a lot of results showing how controversial he became for stating the obvious. Drawing attention to the inequity of the tax regime won him powerful enemies. Those same people are not going to like the authors for writing Winner-Take-All. They say these political science people are condescending because they presume to tell people their political interests.
Many of studies of poverty show how economic and political policies generally favor the rich throughout the world, some of which are cited in this book. Military spending and financial bailouts in particular favor the wealthy. Authors Jacob Hacker and Paul Pierson document a long U.S. policy trend favoring wealthy Americans. This trend resulted in diminished middle class access to quality healthcare and education, making it harder to keep up with the wealthy in relative terms. Further, once people have lost basic foundations of security, they are less willing and able to take on more risk in terms of investing or starting a business.
The rise of special interests has been at the expense of the middle class, according to the authors. Former President Carter talked about this and was ridiculed. Since then government has grown further from most of us. Even federal employees are not like most of us anymore. In its August 10, 2010 issue, USA Today discussed government salaries: "At a time when workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds."
An excellent documentary showing how difficult it is to address income inequality is One Percent, by Jamie Johnson of the Johnson & Johnson family. Collapse: How Societies Choose to Fail or Succeed, by Pulitzer Prize-winner Jared Diamond Collapse: How Societies Choose to Fail or Succeed shows examples of what can happen when a society disregards a coming disaster until too late. I hope that Winner-Take-All will prompt people to demand more of elected officials and to arrest the growing income gap for the sake of our democracy.
4.5 stars-Wall Street speculators control both parties,This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover)
September 19, 2010See all my reviews
This book basically argues that Wall Street controls both political parties through the use of massive campaign contributions and lobbyists who buy off both the Republicans and Democrats in the White House,Senate and House.This is essentially correct but obvious.Anyone can go back to the 1976 Jimmy Carter campaign and simply verify that the majority of his campaign funds and advisors came from Wall Street.This identical conclusion also holds with respect to Ronald Reagan,George H W Bush,Bill Clinton,George W Bush and Barack Obama. The only Presidents/Presidential candidates not dominated by Wall Street since 1976 were Gerald Ford, Walter Mondale, Ross Perot, Ralph Nader and Pat Buchanan.
For instance,it is common knowledge to anyone who carefully checks to see where the money is coming from that Wall Street financiers, hedgefunds, private equity firms and giant commercial banks are calling the shots. For example, one could simply read the July 9,2007 issue of FORTUNE magazine to discover who the major backers of John McCain, Hillary Clinton and Barack Obama were. One could also have read Business Week(2-25-2008) or the Los Angeles Times of 3-21-2008.Through February, 2008 the major donors to the McCain campaign were 1)Merrill Lynch, 2) Citigroup, 3)Goldman Sachs, 4)J P Morgan Chase and 5)Credit Suisse
The major donors to the Hillary Clinton campaign were 1)Goldman Sachs, 2)Morgan Stanley, 3)Citigroup, 4)Lehman Brothers and 5)J P Morgan Chase.
Guess who were the major donors to the Obama campaign ? If you guessed 1)Goldman Sachs,2)UBS Ag,3)J P Morgan Chase ,4)Lehman Brothers and 5)Citigroup, then you are correct.
It didn't matter who became President-Hillary Clinton,Barack Obama or John McCain.All three had been thoroughly vetted by Wall Street. The campaign staffs of all three candidates ,especially their economic and finance advisors, were all Wall Street connected. Wall Street would have been bailed out regardless of which party won the 2008 election.
Obama is not going to change anything substantially in the financial markets. Neither is Rep. Barney Frank, Sen. Chris Dodd, Sen. Kerry or Sen. Schumer, etc. Nor is any Republican candidate going to make any changes, simply because the Republican Party is dominated even more so by Wall Street(100%) than the Democratic Party(80%). The logical solution would be to support a Third Party candidate, for example, Ross Perot .
One aspect of the book is deficient. True conservatives like Ross Perot, Pat Buchanan and Lou Dobbs have been warning about the grave dangers of hallowing out and downsizing the American Manufacturing -Industrial sector, with the consequent offshoring and/or loss of many millions of American jobs, for about 20 years at the same time that the " financial services " sector has exploded from 3% of the total service sector in 1972 to just under 40% by 2007. This is what is causing the great shrinkage in the middle class in America .
Matt Milholland (California)An Important Book,Loyd E. Eskildson "Pragmatist" By(Phoenix, AZ.)
October 9, 2010See all my reviews
This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover)This is a phenomenal book and everyone interested in how American politics works (or more accurately, doesn't work) should pick it up. It's both really smart and really accessible to a lay audience, which is rare for a political science book.
Extreme economic inequality and the near paralysis of our governing institutions has lead to a status-quo that is almost entirely indifferent to the needs of working families. Hacker & Pierson chronicle the rise of this corrupt system and the dual, yet distinct, roles the Republican and Democratic Parties have played in abetting it.
Seriously, it's top-notch. Read this book.Brian Kodi
4.0 out of 5 stars Interesting and Timely, but Also Off-Base in Some Regards,This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover) The thirty-eight biggest Wall Street companies earned $140 billion in 2009, a record that all taxpayers who contributed to their bailouts can be proud of. Among those, Goldman Sachs paid its employees an average $600,000, also a record, and at least partially attributable to our bailout of AIG, which promptly gave much of the money to Goldman. Prior to that, the top 25 hedge fund managers earned an average of $892 million in 2007. "Winner-Take-All Politics" is framed as a detective story about how we got to inequality levels where the top 300,000 (0.1%) receive over 20% of national income, vs. 13.5% for the bottom 180 million (60% of the population).
September 15, 2010See all my reviews
Between 1947 and 1973, real family median income essentially doubled, and the growth percentage was virtually the same for all income levels. In the mid-1970s, however, economic inequality began to increase sharply and middle-incomes lagged. Increased female workforce participation rates and more overtime helped cushion the stagnation or decline for many (they also increased the risk of layoffs/family), then growing credit card debt shielded many families from reality. Unfortunately, expectations of stable full-time employment also began shrinking, part-time, temporary, and economic risk-bearing (eg. taxi drivers leasing vehicles and paying the fuel costs; deliverymen 'buying' routes and trucks) work increased, workers covered by employer-sponsored health insurance fell from 69% in 1979 to 56% in 2004, and retirement coverage was either been dropped entirely or mostly converted to much less valuable fix-contribution plans for private sector employees. Some exceptions have occurred that benefit the middle and lower-income segments - Earned Income Tax Credit (EITC), Medicaid, and Medicare were initiated or expanded, but these have not blunted the overall trend. Conversely, welfare reform, incarceration rates rising 6X between 1970 and 2000, bankruptcy reform, and increased tax audits for EITC recipients have also added to their burden, Social Security is being challenged again (despite stock market declines, enormous transition costs, and vastly increased overhead costs and fraud opportunity), and 2009's universal health care reform will be aggressively challenged both in the courts and Washington.
Authors Hacker and Pierson contend that growing inequality is not the 'natural' product of market rewards, but mostly the artificial result of deliberate government policies, strongly influenced by industry lobbyists and donations, new and expanded conservative 'think tanks,' and inadequate media coverage that focused more on the 'horse race' aspects of various initiatives than their content and impact. First came the capital gains tax cuts under President Carter, then deregulation of the financial industry under Clinton, the Bush tax cuts of 2001 and 2003, and the financial bailouts in 2008-09. The authors contend that if the 1970 tax structure remained today, the top gains would be considerably less.
But what about the fact that in 1965 CEOs of large corporations only earned about 24X the average worker, compared to 300+X now? Hacker and Pierson largely ignore the role of board-room politics and malfeasance that have mostly allowed managers to serve themselves with payment without regard to performance and out of proportion to other nations. In 2006, the 20 highest-paid European managers made an average $12.5 million, only one-third as much as the 20 highest-earning U.S. executives. Yet, the Europeans led larger firms - $65.5 billion in sales vs. $46.5 billion for the U.S. Asian CEOs commonly make only 10X-15X what their base level employees make. Jiang Jianqing, Chairman of the Industrial and Commercial Bank of China (world's largest), made $234,700 in 2008, less than 2% of the $19.6 million awarded Jamie Dimon, CEO of the world's fourth-largest bank, JPMorgan Chase.
"Winner-Take-All Politics" also provides readers with the composition of 2004 taxpayers in the top 0.1% of earners (including capital gains). Non-finance executives comprised 41% of the group, finance professionals 18.4%, lawyers 6%, real estate personages 5%, physicians 4%, entrepreneurs 4%, and arts and sports stars 3%. The authors assert that this shows education and skills levels are not the great dividers most everyone credits them to be - the vast majority of Americans losing ground to the super-rich includes many well-educated individuals, while the super-rich includes many without a college education (Sheldon Adelson, Paul Allen, Edgar Bronfman, Jack Kent Cook, Michael Dell, Walt Disney, Larry Ellison, Bill Gates, Wayne Huizenga, Steve Jobs, Rush Limbaugh, Steve Wozniak, and Mark Zuckerberg).
Authors Hacker and Pierson are political science professors and it is understandable that they emphasize political causes (PACs, greater recruitment of evangelical voters, lobbying - eg. $500 million on health care lobbying in 2009, filibusters that allow senators representing just 10% of the population to stop legislation and make the other side look incompetent, etc.) for today's income inequality. However, their claim that foreign trade is "largely innocent" as a cause is neither substantiated nor logical. Foreign trade as practiced today pads corporate profits and executive bonuses while destroying/threatening millions of American jobs and lowering/holding down the incomes of those affected. Worse yet, the authors don't even mention the impact of millions of illegal aliens depressing wage rates while taking jobs from Americans, nor do they address the canard that tax cuts for and spending by the super-wealthy are essential to our economic success (refuted by Moody's Analytics and Austan Goolsbee, Business Week - 9/13/2010). They're also annoyingly biased towards unions, ignoring their constant strikes and abuses in the 1960s and 1970s, major contributions to G.M., Chrysler, and legacy airline bankruptcies, and current school district, local, and state financial difficulties.
Bottom-Line: It is a sad commentary on the American political system that growing and record levels of inequality are being met by populist backlash against income redistribution and expanding trust in government, currently evidenced by those supporting extending tax cuts for the rich and railing against reforming health care to reduce expenditures from 17.3+% of GDP to more internationally competitive levels (4-6%) while improving patient outcomes. "Winner-Take-All Politics" is interesting reading, provides some essential data, and point out some evidence of the inadequacy of many voters. However, the authors miss the 'elephant in the room' - American-style democracy is not viable when at most 10% of citizens are 'proficient' per functional literacy tests ([...]), and only a small proportion of them have the time and access required to sift through the flood of half-truths, lies, and irrelevancies to objectively evaluate 2,000+ page bills and other political activity. (Ideology-dominated economic professionals and short-term thinking human rights advocates are two others.) Comments (2)J. Strauss (NYC)
"Americans live in Russia, but they think they live in Sweden." - Chrystia Freeland,
March 26, 2011See all my reviews
This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover)
No one should doubt the rising income inequality in America, which the authors trace back to the late 1970s since the latter part of Carter's presidency in what they call the "30 Year War". Zachary Roth, in a March 4th Time magazine article stated "A slew of conservative economists of unimpeachable academic credentials--including Martin Feldstein of Harvard, Glenn Hubbard, who was President Bush's top economic adviser, and Federal Reserve chair Ben Bernanke--have all acknowledged that inequality is on the rise."
And why should we care that most of the after tax income growth since 30 years ago has gone the way of the richest Americans in a "winner-take-all" economy? Because as Supreme Court justice biographer Melvin Urofsky stated, "in a democratic society the existence of large centers of private power is dangerous to the continuing vitality of a free people." (p. 81) Because if unchecked, a new economic aristocracy may replace the old hereditary aristocracy America's Founders fought to defeat (p. 298). Because unequal societies are unhappy societies, and inequality can foster individual resentment that may lead to a pervasive decline in civility and erosion of culture.
And why should we be concerned that this trend in rising inequality may not experience the period of renewal the authors are optimistic about? Because unlike the shock of the 1930s' Great Depression that served as the impetus for the politics of middle class democracy, the potential shockwaves of the 2008 Great Recession were tempered by massive government stimulus, resulting in no meaningful financial reform, and an extension of the tax cuts for the wealthy. And because of the lottery mentality of a large swath of the population which opposes tax increases on the rich. One day, they or their children too can share in the American dream. According to an October 2000 Time-CNN poll, 19 percent of Americans were convinced they belonged to the richest 1 percent. Another 20 percent thought they'd make the rank of the top 1 percent at some point in their lives. That's quite a turnover in the top 1 percent category to accommodate 20 percent of the population passing through.
Mr. Hacker and Mr. Pierson have put together powerful arguments on the root causes of income inequality in the U.S., its political and economic ramifications, and to a lesser extent, a roadmap to returning democracy to the masses. This is an eye opening and disturbing, yet informative book, even for readers who may disagree with their opinions.
3.0 out of 5 stars great history of big money influence on policy but needs more analysis of the ways policy affects the winner-take-all economy,
September 21, 2011See all my reviews
Amazon Verified Purchase(What's this?)This review is from: Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class (Hardcover)
A bit hokey and repetitive for the first couple chapters. Much better after that. Stick with it if you're interested in the subject.
This book does a very good job explaining how and why certain special interest groups (notably those that represent the wealthiest .1%) have come to have such a stranglehold on government, particularly Congress. I come away with a clear understanding of how the wealthiest citizens are able to exert their influence over legislative policy and enforcement at the federal level.
What I would have liked more of are better explanations of the mechanisms through which government policies exacerbate the winner-take-all economy. Tax policy (rates and loopholes) is the most obvious answer, and the book provides plenty of stats on the regression of tax policy over the past 30 years.
But complicated, interesting, and largely missing from public discourse is why PRE-TAX incomes have become so much more radically skewed during that time. This is certainly touched on - the authors are deliberate in saying it's not JUST tax policy that's contributing to increased inequality - but I would've liked much more analysis of the other policy-driven factors. "Deregulation" is too general an explanation to paint a clear picture.
The authors make it clear that they believe the increasing divide in pre-tax incomes (the winner-take-all economy) is not the inevitable result of technological changes and of differences in education ("the usual suspects"), but of policy decisions made at the state and, especially, federal levels. Personally, I wasn't fully convinced that technological change has little or nothing to do with the skew (though I agree that while education goes a long way toward explaining the gap between poor and middle class, it doesn't explain much of the gap between middle class and super rich). But I do believe, as they do, that public policy plays a large role in influencing the extent of inequality in pre-tax incomes, even beyond more obvious market-impacting factors like union influence, and mandates including the minimum wage, restrictions on pollution, workplace safety and fairness laws, etc.
Off the top of my head, here are some regulatory issues that affect market outcomes and can influence the extent of winner-take-all effects in the marketplace (a few of these may have been mentioned in the book, but none were discussed in detail):
- the enforcement of antitrust laws and other means of encouraging pro-consumer competition in the marketplace, such as cracking down on explicit or implicit price-fixing and collusion schemes [concentration of market share and/or collusion will certainly contribute to winner-take-all effects at the expense of consumers, small businesses and the dynamics of the economy as a whole.]
- regulations that seek to minimize conflicts of interest in the corporate world, particularly those with far-reaching effects [i.e. some policy makers and regulators are in a position to decide whether it makes sense for bond ratings agencies with the authority they have over so many investment decisions to be paid, in negotiable fashion, by the companies whose bonds they rate. i'd wager the status quo exacerbates winner-take-all and not in a way that rewards the right things - but i'd be glad to hear an intellectually honest counter-argument]
- net neutrality [should internet service providers be allowed to favor their corporate partners' websites to the point that eventually you'll no longer be able to publish a blog and expect that anyone will be able to access it expediently?]
- insurance regulation [should we rely on reputation threat alone to discourage insurer's from stiffing their policyholders' legitimate claims? status quo we don't, but there are those who argue against regulation of insurers]
- broad macroeconomic goals, such as relative balance between imports and exports, or attempts to encourage educational institutions to help align workforce skills with projected job opportunities for instance - enforced preferably through various incentives rather than mandates [the U.S. isn't big on this at the moment but many other rich countries are, in varying forms]
- preferential treatment of small businesses to help them compete with "the big boys", thereby increasing competition in the market and job-creation
- preferential treatment of businesses who do various things deemed to be in the public interest
- intellectual property laws (the extent of patent, copyright, trademark rights)
- securities law, including bans on insider trading, front-running, etc
- food safety and labeling laws
- allocation and extent of government-sponsored R&D in industries deemed important or potentially beneficial to the public
- restrictions on what can be bought and sold [almost no one would argue judge's decisions should be for sale to the highest bidder. how about cigarette sales to kids, should that be allowed? heroin to anyone? spots in the class of a competitive public university?]
And many more. I know regulatory issues like that play huge roles in the distribution of pre-tax "market" incomes, but I'd like to have a better understanding of how, and also to be better able to articulate how in response to those who seem to believe taxes (and perhaps obvious restrictions, such as on pollution or the minimum wage) are the only significant means through which governments influence wealth disparities.
There wasn't a whole lot of discussion of these or similar regulatory issues in the book. I would like to see another edition, or perhaps another book entirely, that does. Please let me know if you have any recommendations.
"You load 16 tons and whaddaya get??
Another day older and deeper in debt
Saint Peter don'tcha call me 'Cause-I can't go…
I owe my soul to the Company Store"
-- "Sixteen Tons"
Dec 12, 2017 | www.nakedcapitalism.com
Uber lost $2.5 billion in 2015, probably lost $4 billion in 2016, and is on track to lose $5 billion in 2017.
The top line on the table below shows is total passenger payments, which must be split between Uber corporate and its drivers. Driver gross earnings are substantially higher than actual take home pay, as gross earning must cover all the expenses drivers bear, including fuel, vehicle ownership, insurance and maintenance.
Most of the "profit" data released by Uber over time and discussed in the press is not true GAAP (generally accepted accounting principles) profit comparable to the net income numbers public companies publish but is EBIDTAR contribution. Companies have significant leeway as to how they calculate EBIDTAR (although it would exclude interest, taxes, depreciation, amortization) and the percentage of total costs excluded from EBIDTAR can vary significantly from quarter to quarter, given the impact of one-time expenses such as legal settlements and stock compensation. We only have true GAAP net profit results for 2014, 2015 and the 2nd/3rd quarters of 2017, but have EBIDTAR contribution numbers for all other periods. 
Uber had GAAP net income of negative $2.6 billion in 2015, and a negative profit margin of 132%. This is consistent with the negative $2.0 billion loss and (143%) margin for the year ending September 2015 presented in part one of the NC Uber series over a year ago.
No GAAP profit results for 2016 have been disclosed, but actual losses likely exceed $4 billion given the EBIDTAR contribution of negative $3.2 billion. Uber's GAAP losses for the 2nd and 3rd quarters of 2017 were over $2.5 billion, suggesting annual losses of roughly $5 billion.
While many Silicon Valley funded startups suffered large initial losses, none of them lost anything remotely close to $2.6 billion in their sixth year of operation and then doubled their losses to $5 billion in year eight. Reversing losses of this magnitude would require the greatest corporate financial turnaround in history.
No evidence of significant efficiency/scale gains; 2015 and 2016 margin improvements entirely explained by unilateral cuts in driver compensation, but losses soared when Uber had to reverse these cuts in 2017.
Total 2015 gross passenger payments were 200% higher than 2014, but Uber corporate revenue improved 300% because Uber cut the driver share of passenger revenue from 83% to 77%. This was an effective $500 million wealth transfer from drivers to Uber's investors. These driver compensation cuts improved Uber's EBIDTAR margin, but Uber's P&L gains were wiped out by higher non-EBIDTAR expense. Thus the 300% Uber revenue growth did not result in any improvement in Uber profit margins.
In 2016, Uber unilaterally imposed much larger cuts in driver compensation, costing drivers an additional $3 billion.  Prior to Uber's market entry, the take home pay of big-city cab drivers in the US was in the $12-17/hour range, and these earnings were possible only if drivers worked 65-75 hours a week.
An independent study of the net earnings of Uber drivers (after accounting for the costs of the vehicles they had to provide) in Denver, Houston and Detroit in late 2015 (prior to Uber's big 2016 cuts) found that driver earnings had fallen to the $10-13/hour range.  Multiple recent news reports have documented how Uber drivers are increasing unable to support themselves from their reduced share of passenger payments. 
A business model where profit improvement is hugely dependent on wage cuts is unsustainable, especially when take home wages fall to (or below) minimum wage levels. Uber's primary focus has always been the rate of growth in gross passenger revenue, as this has been a major justification for its $68 billion valuation. This growth rate came under enormous pressure in 2017 given Uber efforts to raise fares, major increases in driver turnover as wages fell,  and the avalanche of adverse publicity it was facing.
Since mass driver defections would cause passenger volume growth to collapse completely, Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017.
MKS , December 12, 2017 at 6:19 amJohnnySacks , December 12, 2017 at 7:34 am
"Uber's business model can never produce sustainable profits"
Two words not in my vocabulary are "Never" and "Always", that is a pretty absolute statement in an non-absolute environment. The same environment that has produced the "Silicon Valley Growth Model", with 15x earnings companies like NVIDA, FB and Tesla (Average earnings/stock price ratio in dot com bubble was 10x) will people pay ridiculous amounts of money for a company with no underlying fundamentals you damn right they will! Please stop with the I know all no body knows anything, especially the psychology and irrationality of markets which are made up of irrational people/investors/traders.SoCal Rhino , December 12, 2017 at 8:30 am
My thoughts exactly. Seems the only possible recovery for the investors is a perfectly engineered legendary pump and dump IPO scheme. Risky, but there's a lot of fools out there and many who would also like to get on board early in the ride in fear of missing out on all the money to be hoovered up from the greater fools. Count me out.tegnost , December 12, 2017 at 9:52 am
The author clearly distinguishes between GAAP profitability and valuations, which is after all rather the point of the series. And he makes a more nuanced point than the half sentence you have quoted without context or with an indication that you omitted a portion. Did you miss the part about how Uber would have a strong incentive to share the evidence of a network effect or other financial story that pointed the way to eventual profit? Otherwise (my words) it is the classic sell at a loss, make it up with volume path to liquidation.allan , December 12, 2017 at 6:52 am
apples and oranges comparison, nvidia has lots and lots of patented tech that produces revenue, facebook has a kajillion admittedly irrational users, but those users drive massive ad sales (as just one example of how that company capitalizes itself) and tesla makes an actual car, using technology that inspires it's buyers (the put your money where your mouth is crowd and it can't be denied that tesla, whatever it's faults are, battery tech is not one of them and that intellectual property is worth a lot, and tesla's investors are in on that real business, profitable or otherwise)
Uber is an iphone app. They lose money and have no path to profitability (unless it's the theory you espouse that people are unintelligent so even unintelligent ideas work to fleece them). This article touches on one of the great things about the time we now inhabit, uber drivers could bail en masse, there are two sides to the low attachment employees who you can get rid of easily. The drivers can delete the uber app as soon as another iphone app comes along that gets them a better returnThuto , December 12, 2017 at 6:55 am
Yet another source (unintended) of subsidies for Uber, Lyft, etc., which might or might not have been mentioned earlier in the series:
Airports Are Losing Money as Ride-Hailing Services Grow [NYT]
For many air travelers, getting to and from the airport has long been part of the whole miserable experience. Do they drive and park in some distant lot? Take mass transit or a taxi? Deal with a rental car?
Ride-hailing services like Uber and Lyft are quickly changing those calculations. That has meant a bit less angst for travelers.
But that's not the case for airports. Travelers' changing habits, in fact, have begun to shake the airports' financial underpinnings. The money they currently collect from ride-hailing services do not compensate for the lower revenues from the other sources.
At the same time, some airports have had to add staff to oversee the operations of the ride-hailing companies, the report said. And with more ride-hailing vehicles on the roads outside terminals,
there's more congestion.
Socialize the losses, privatize the gains, VC-ize the subsidies.Louis Fyne , December 12, 2017 at 8:35 am
The cold hard truth is that Uber is backed into a corner with severely limited abilities to tweak the numbers on either the supply or the demand side: cut driver compensation and they trigger driver churn (as has already been demonstrated), increase fare prices for riders and riders defect to cheaper alternatives. The only question is how long can they keep the show going before the lights go out, slick marketing and propaganda can only take you so far, and one assumes the dumb money has a finite supply of patience and will at some point begin asking the tough questions.Thuto , December 12, 2017 at 11:30 am
The irony is that Uber would have been a perfectly fine, very profitable mid-sized company if Uber stuck with its initial model -- sticking to dense cities with limited parking, limiting driver supply, and charging a premium price for door-to-door delivery, whether by livery or a regular sedan. And then perhaps branching into robo-cars.
But somehow Uber/board/Travis got suckered into the siren call of self-driving cars, triple-digit user growth, and being in the top 100 US cities and on every continent.David Carl Grimes , December 12, 2017 at 6:57 am
I've shared a similar sentiment in one of the previous posts about Uber. But operating profitably in decent sized niche doesn't fit well with ambitions of global domination. For Uber to be "right-sized", an admission of folly would have to be made, its managers and investors would have to transcend the sunk cost fallacy in their strategic decision making, and said investors would have to accept massive hits on their invested capital. The cold, hard reality of being blindsided and kicked to the curb in the smartphone business forced RIM/Blackberry to right-size, and they may yet have a profitable future as an enterprise facing software and services company. Uber would benefit from that form of sober mindedness, but I wouldn't hold my breath.Michael Fiorillo , December 12, 2017 at 9:33 am
The question is: Why did Softbank invest in Uber?JimTan , December 12, 2017 at 10:50 am
I know nothing about Softbank or its management, but I do know that the Japanese were the dumb money rubes in the late '80's, overpaying for trophy real estate they lost billions on.
Until informed otherwise, that's my default assumptionYves Smith Post author , December 12, 2017 at 11:38 am
Softbank possibly looking to buy more Uber shares at a 30% discount is very odd. Uber had a Series G funding round in June 2016 where a $3.5 billion investment from Saudi Arabia's Public Investment Fund resulted in its current $68 billion valuation. Now apparently Softbank wants to lead a new $6 billion funding round to buy the shares of Uber employees and early investors at a 30% discount from this last "valuation". It's odd because Saudi Arabia's Public Investment Fund has pledged $45 billion to SoftBank's Vision Fund , an amount which was supposed to come from the proceeds of its pending Aramco IPO. If the Uber bid is linked to SoftBank's Vision Fund, or KSA money, then its not clear why this investor might be looking to literally 'double down' from $3.5 billion o $6 billion on a declining investment.Robert McGregor , December 12, 2017 at 7:04 am
SoftBank has not yet invested. Its tender is still open. If it does not get enough shares at a price it likes, it won't invest.
As to why, I have no idea.divadab , December 12, 2017 at 7:19 am
"Growth and Efficiency" are the sine qua non of Neoliberalism. Kalanick's "hype brilliance" was to con the market with "revenue growth" and signs of efficiency, and hopes of greater efficiency, and make most people just overlook the essential fact that Uber is the most unprofitable company of all time!Phil in Kansas City , December 12, 2017 at 7:55 am
What comprises "Uber Expenses"? 2014 – $1.06 billion; 2015 $3.33 billion; 2016 $9.65 billion; forecast 2017 $11.418 billion!!!!!! To me this is the big question – what are they spending $10 billion per year on?
ALso – why did driver share go from 68% in 2016 to 80% in 2017? If you use 68% as in 2016, 2017 Uber revenue is $11.808 billion, which means a bit better than break-even EBITDA, assuming Uber expenses are as stated $11.428 billion.
Perhaps not so bleak as the article presents, although I would not invest in this thing.lyman alpha blob , December 12, 2017 at 2:37 pm
I have the same question: What comprises over 11 billion dollars in expenses in 2017? Could it be they are paying out dividends to the early investors? Which would mean they are cannibalizing their own company for the sake of the VC! How long can this go on before they'll need a new infusion of cash?Vedant Desai , December 12, 2017 at 10:37 am
The Saudis have thrown a few billion Uber's way and they aren't necessarily known as the smart money.
Maybe the pole dancers have started chipping in too as they are for bitcoin .Louis Fyne , December 12, 2017 at 8:44 am
Oh article does answer your 2nd question. Read this paragraph:-
Since mass driver defections would cause passenger volume growth to collapse completely , Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017.
As for the 1st, read this line in the article:-
There are undoubtedly a number of things Uber could do to reduce losses at the margin, but it is difficult to imagine it could suddenly find the $4-5 billion in profit improvement needed merely to reach breakeven.Alfred , December 12, 2017 at 9:49 am
in addition to all the points listed in the article/comments, the absolute biggest flaw with Uber is that Uber HQ conditioned its customers on (a) cheap fares and (b) that a car is available within minutes (1-5 if in a big city).
Those two are not mutually compatible in the long-term.Martin Finnucane , December 12, 2017 at 11:06 am
Thus (a) "We cost less" and (b) "We're more convenient" -- aren't those also the advantages that Walmart claims and feeds as a steady diet to its ever hungry consumers? Often if not always, disruption may repose upon delusion.Altandmain , December 12, 2017 at 11:09 am
Uber's business model could never produce sustainable profits unless it was able to exploit significant anti-competitive market power.
Upon that dependent clause hangs the future of capitalism, and – dare I say it? – its inevitable demise.Jim A. , December 12, 2017 at 12:21 pm
When this Uber madness blows up, I wonder if people will finally begin to discuss the brutal reality of Silicon Valley's so called "disruption".
It is heavily built in around the idea of economic exploitation. Uber drivers are often, especially when the true costs to operate an Uber including the vehicle depreciation are factored in, making not very much per hour driven, especially if they don't get the surge money.
Instacart is another example. They are paying the deliver operators very little.Altandmain , December 12, 2017 at 5:40 pm
At a fundamental level, I think that the Silicon Valley "disruption" model only works for markets (like software) where the marginal cost for production is de minimus and the products can be protected by IP laws. Volume and market power really work in those cases. But out here in meat-space, where actual material and labor are big inputs to each item sold, you can never just sit back on your laurels and rake in the money. Somebody else will always be able to come and and make an equivalent product. If they can do it more cheaply, you are in trouble.Joe Bentzel , December 12, 2017 at 2:19 pm
There aren't that many areas in goods and services where the marginal costs are very low.
Software is actually quite unique in that regard, costing merely the bandwidth and permanent storage space to store.
1. From the article, they cannot go public and have limited ways to raise more money. An IPO with its more stringent disclosure requirements would expose them.
2. They tried lowering driver compensation and found that model unsustainable.
3. There are no benefits to expanding in terms of economies of scale.
From where I am standing, it looks like a lot of industries gave similar barriers. Silicon Valley is not going to be able to disrupt those.
Tesla, another Silicon Valley company seems to be struggling to mass produce its Model 3 and deliver an electric car that breaks even, is reliable, while disrupting the industry in the ways that Elon Musk attempted to hype up.
So that basically leaves services and manufacturing out for Silicon Valley disruption.Phil in KC , December 12, 2017 at 3:20 pm
UBER has become a "too big to fail" startup because of all the different tentacles of capital from various Tier 1 VCs and investment bankers.
VCs have admitted openly that UBER is a subsidized business, meaning it's product is sold below market value, and the losses reflect that subsidization. The whole "2 sided platform" argument is just marketecture to hustle more investors. It's a form of service "dumping" that puts legacy businesses into bankruptcy. Back during the dotcom bubble one popular investment banker (Paul Deninger) characterized this model as "Terrorist Competition", i.e. coffers full of invested cash to commoditize the market and drive out competition.
UBER is an absolute disaster that has forked the startup model in Silicon Valley in order to drive total dependence on venture capital by founders. And its current diversification into "autonomous vehicles", food delivery, et al are simply more evidence that the company will never be profitable due to its whacky "blitzscaling" approach of layering on new "businesses" prior to achieving "fit" in its current one.
It's economic model has also metastasized into a form of startup cancer that is killing Silicon Valley as a "technology" innovator. Now it's all cargo cult marketing BS tied to "strategic capital".
UBER is the victory of venture capital and user subsidized startups over creativity by real entrepreneurs.
It's shadow is long and that's why this company should be ..wait for it UNBUNDLED (the new silicon valley word attached to that other BS religion called "disruption"). Call it a great unbundling and you can break up this monster corp any way you want.
Naked Capitalism is a great website.Phil in KC , December 12, 2017 at 3:10 pm
1. I Agree with your last point.
2. The elevator pitch for Uber: subsidize rides to attract customers, put the competition out of business, and then enjoy an unregulated monopoly, all while exploiting economically ignorant drivers–ahem–"partners."
3. But more than one can play that game, and
4. Cab and livery companies are finding ways to survive!Jan Stickle , December 12, 2017 at 5:00 pm
If subsidizing rides is counted as an expense, (not being an accountant, I would guess it so), then whether the subsidy goes to the driver or the passenger, that would account for the ballooning expenses, to answer my own question. Otherwise, the overhead for operating what Uber describes as a tech company should be minimal: A billion should fund a decent headquarters with staff, plus field offices in, say, 100 U.S. cities. However, their global pretensions are probably burning cash like crazy. On top of that, I wonder what the exec compensation is like?
After reading HH's initial series, I made a crude, back-of-the-envelope calculation that Uber would run out of money sometime in the third fiscal quarter of 2018, but that was based on assuming losses were stabilizing in the range of 3 billion a year. Not so, according to the article. I think crunch time is rapidly approaching. If so, then SoftBank's tender offer may look quite appetizing to VC firms and to any Uber employee able to cash in their options. I think there is a way to make a re-envisioned Uber profitable, and with a more independent board, they may be able to restructure the company to show a pathway to profitability before the IPO. But time is running out.
A not insignificant question is the recruitment and retention of the front line "partners." It would seem to me that at some point, Uber will run out of economically ignorant drivers with good manners and nice cars. I would be very interested to know how many drivers give up Uber and other ride-sharing gigs once the 1099's start flying at the beginning of the year. One of the harsh realities of owning a business or being an contractor is the humble fact that you get paid LAST!
We became instant Uber riders while spending holidays with relatives in San Diego. While their model is indeed unique from a rider perspective, it was the driver pool that fascinates me. These are not professional livery drivers, but rather freebooters of all stripes driving for various reasons. The remuneration they receive cannot possibly generate much income after expenses, never mind the problems associated with IRS filing as independent contractors.
One guy was just cruising listening to music; cooler to get paid for it than just sitting home! A young lady was babbling and gesticulating non stop about nothing coherent and appeared to be on some sort of stimulant. A foreign gentleman, very professional, drove for extra money when not at his regular job. He was the only one who had actually bought a new Prius for this gig, hoping to pay it off in two years.
This is indeed a brave new world. There was a period in Nicaragua just after the Contra war ended when citizens emerged from their homes and hit the streets in large numbers, desperately looking for income. Every car was a taxi and there was a bipedal mini Walmart at every city intersection as individuals sold everything and anything in a sort of euphoric optimism towards the future. Reality just hadn't caught up with them yet .
Dec 09, 2017 | bonddad.blogspot.com
So U6 is almost 10% of population. Scary...HEADLINES :
Here are the headlines on wages and the chronic heightened underemployment: Wages and participation rates
- +228,000 jobs added
- U3 unemployment rate unchanged at 4.1%
- U6 underemployment rate rose +0.1% from 7.9% to 8.0%
Holding Trump accountable on manufacturing and mining jobs
- Not in Labor Force, but Want a Job Now: rose +53,000 from 5.175 million to 5.238 million
- Part time for economic reasons: rose +48,000 from 4.753 million to 4.801 million
- Employment/population ratio ages 25-54: rose +0.2% from 78.8% to 79.0%
- Average Weekly Earnings for Production and Nonsupervisory Personnel: rose +$.0.5 from a downwardly revised $22.19 to $22.24, up +2.4% YoY. (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
Trump specifically campaigned on bringing back manufacturing and mining jobs. Is he keeping this promise?
- Manufacturing jobs rose by +31,000 for an average of +15,000 a month vs. the last seven years of Obama's presidency in which an average of 10,300 manufacturing jobs were added each month.
- Coal mining jobs fell -400 for an average of -15 a month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
September was revised upward by +20,000. October was revised downward by -17,000, for a net change of +3,000.
- likbez December 9, 2017 7:52 pm
There are now large categories of jobs, both part-time and full time, that can't provide for living and are paying below or close to minimum wage (plantation economy jobs). it looks like under neoliberalism this is the fastest growing category of jobs.
Examples are Uber and Lift jobs (which are as close to predatory scam as one can get) . Many jobs in service industry, especially retail. See for example
They should probably be calculated separately as "distressed employment", or something like that.
Also in view of "seasonal adjustments" the number of created jobs is probably meaningless.
On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not.
The first is a golden rule of sorts on doing anything:
You can only pick two; NO exceptions. I've encountered so many upper management types that foolishly think they can get away with having all three. In my experience 9/10 of the time it turns out a lack of quality bites them in the butt sometime down the road when they assumed they somehow managed to achieve all three.
The second is communication. Mostly everyone in at least the US has experienced the pain of being subjected to some company's outsourced customer service and/or tech support that can't effectively communicate with both parties on the same page of understanding one another. I really shouldn't need to explain why communication, understanding one another is so important. Sadly this is something I have to constantly explain to my current boss with events like today where my non-outsourced colleague rebooted a number of production critical servers when he was asked to reboot just one secondary server.
Third is the employee's skill in doing the job. Again, another obvious one, but I've observed that it isn't always on the hiring menu. Additionally I've seen some people that interview well, but couldn't create a "Hello World" HTML page for a web developer position as an example. There's no point in hiring or keeping a hired individual to do a job that they lack the skill to do; even if it's an entry-level position with training, that person should be willing to put for the effort to learn and take notes. I accept that everyone has their own unique skills that can aide or hinder their ability to learn and be proficient with a particular task. However, I firmly believe anyone can learn to do anything as long as they put their mind to it. I barely have any artistic ability and my drawing skills are stick figures at best (XKCD is miles ahead of me); if I were to put forth the effort to learn how to draw and paint, I could become a good artist. I taught an A+ technician certification class at a tech school a while back and I had a retired Marine that served in the Vietnam War as one of my students. One could argue his best skill was killing and blowing stuff up. He worked hard and learned to be a technician and passed CompTIA's certification test without a problem. That leads me to the next point.
Lastly is attitude of the end employee doing the actual work. It boggles my mind how so many managers loose the plot when it comes to employee morale and motivation. Productivity generally is improved when those two are improved and it usually doesn't have to involve spending a bunch of money. The employee's attitude should be getting the work done correctly in a reasonable amount of time. Demanding it is a poor approach. Poisoning an employee will result in poisoning the company in a small manner all the way up to the failure of the company. Employees should be encouraged through actual morale improvements, positive motivation, and incentives for doing more work at the same and/or better quality level.
Outsourcing or keeping things in house can be successful and possibly economical if approached correctly with the appropriate support of upper management.
Max Littlemore (1001285)
How dramatic? Isn't outsourcing done (like it or not) to reduce costs?
Outsourcing is done to reduce the projected costs that PHBs see. In reality, outsourcing can lead to increased costs and delays due to time zone differences and language/cultural barriers.
I have seen it work reasonably well, but only when the extra effort and delays caused by the increased need for rework that comes from complex software projects. If you are working with others on software, it is so much quicker to produce quality software if the person who knows the business requirements is sitting right next to the person doing design and the person cutting code and the person doing the testing, etc, etc.
If these people or groups are scattered around the world with different cultures and native languages, communication can suffer, increasing misunderstanding and reducing the quality. I have personally seen this lead to massive increase in code defects in a project that went from in house development to outsourced.
Also, time zone differences cause problems. I have noticed that the further west people live, the less likely they are to take into account how far behind they are. Working with people who fail to realise that their Monday morning is the next day for someone else, or that by the time they are halfway through Friday, others are already on their weekend is not only frustrating, it leads to slow turn around of bug fixes, etc.
Yeah, I'm told outsourcing keeps costs down, but I am yet to see conclusive evidence of that in the real world. At least in complex development. YMMV for support/call centre stuff.
-- I don't therefore I'm not.
Apr 07, 2010 | Enterprise Networking Planet
What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. Every application, every piece of network gear, and how every server was configured -- these people could save a business in times of disaster.
Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye.
You know the story: Company installs new application, nobody understands it yet, so an expert is hired. Often, the person with a certification in using the new application only really knows how to run that application. Perhaps they aren't interested in learning anything else, because their skill is in high demand right now. And besides, everything else in the infrastructure is run by people who specialize in those elements. Everything is taken care of.
Except, how do these teams communicate when changes need to take place? Are the storage administrators teaching the Windows administrators about storage multipathing; or worse logging in and setting it up because it's faster for the storage gurus to do it themselves? A fundamental level of knowledge is often lacking, which makes it very difficult for teams to brainstorm about new ways evolve IT services. The business environment has made it OK for IT staffers to specialize and only learn one thing.
If you hire someone certified in the application, operating system, or network vendor you use, that is precisely what you get. Certifications may be a nice filter to quickly identify who has direct knowledge in the area you're hiring for, but often they indicate specialization or compensation for lack of experience.
Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is.
The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue.
Most often, I've seen competition between server groups result in horribly inefficient uses of hardware. For example, what happens in your organization when one team needs more server hardware? Assume that another team has five unused servers sitting in a blade chassis. Does the answer change? No, it does not. Even in test environments, sharing doesn't often happen between IT groups.
With virtualization, some aspects of resource competition get better and some remain the same. When first implemented, most groups will be running their own type of virtualization for their platform. The next step, I've most often seen, is for test servers to get virtualized. If a new group is formed to manage the virtualization infrastructure, virtual machines can be allocated to various application and server teams from a central pool and everyone is now sharing. Or, they begin sharing and then demand their own physical hardware to be isolated from others' resource hungry utilization. This is nonetheless a step in the right direction. Auto migration and guaranteed resource policies can go a long way toward making shared infrastructure, even between competing groups, a viable option.
The most damaging side effect of splitting into too many distinct IT groups is the reinforcement of an "us versus them" mentality. Aside from the notion that specialization creates a lack of knowledge, blamestorming is what this article is really about. When a project is delayed, it is all too easy to blame another group. The SAN people didn't allocate storage on time, so another team was delayed. That is the timeline of the project, so all work halted until that hiccup was restored. Having someone else to blame when things get delayed makes it all too easy to simply stop working for a while.
More related to the initial points at the beginning of this article, perhaps, is the blamestorm that happens after a system outage.
Say an ERP system becomes unresponsive a few times throughout the day. The application team says it's just slowing down, and they don't know why. The network team says everything is fine. The server team says the application is "blocking on IO," which means it's a SAN issue. The SAN team say there is nothing wrong, and other applications on the same devices are fine. You've ran through nearly every team, but without an answer still. The SAN people don't have access to the application servers to help diagnose the problem. The server team doesn't even know how the application runs.
See the problem? Specialized teams are distinct and by nature adversarial. Specialized staffers often relegate themselves into a niche knowing that as long as they continue working at large enough companies, "someone else" will take care of all the other pieces.
I unfortunately don't have an answer to this problem. Maybe rotating employees between departments will help. They gain knowledge and also get to know other people, which should lessen the propensity to view them as outsiders
Jun 05, 2015 | economistsview.typepad.comWillem Buiter, Ebrahim Rahbari, Joe Seydl at Vox EU:
Secular stagnation: The time for one-armed policy is over: Stagnation is gripping several of the world's largest economies and many view this as secular, not transient.
This column argues that many economies need both demand-side stimulus and supply-side reform to close the output gap and restore potential-output growth. A combined monetary-fiscal stimulus – i.e. helicopter money – is needed to close the output gap, and this should be accompanied with extensive debt restructuring, policies to halt rising inequality, and additional public infrastructure investment.
Selected Skeptical Comments
Sandwichman -> anne:
Workers, collectively, have a single, incontrovertible lever for effecting change -- withholding their labor power. Nothing -- not even imprisonment or death -- can prevent workers from withholding their labor power! Kill me and see how much work you can get out of me.
This is the elementary fact that the elites don't want workers to know. "It is futile!" "It is a fallacy!" "You will only hurt yourselves!"
Once one comprehends the strategic importance of making the withholding of labor power taboo, everything else falls into place. Economics actually makes sense as a persuasive discourse to dissuade from the withholding of labor power.
Above all, ideology must conceal, denigrate, diminish, slander and distract from the ONE effective strategy that workers collectively have. This is the spectre that haunts all economics.
Good stuff by Buiter et al, but here are some suggested additions to the litany of supply side woes:
1. Ineffective economic organization, both inside corporate firms and outside of them.
a. Many corporations are now quite dysfunctional as engines of long-term value creation – but not dysfunctional as vehicles of short-term value extraction for their absurdly over-incentivized key stakeholders.
b. The developed world societies are facing an extreme failure of strategic economic leadership, at both the national and global level, and at both the formal level of government and the informal level of visionary public intellectuals and industrial "captains". There is no coherent consensus on which way lies the direction of progress. Since nobody is setting the agenda for what the future looks like, risk trumps confidence everywhere and nobody knows what to invest in.
2. Dyspeptic dystopianism. The intellectual culture of our times is polluted by obsessive, nail-biting negativity and demoralizing storylines preaching hopelessness: the robots are going to destroy all the jobs; the Big One is going to bury everything, the real "neutral" interest rate is preposterously negative, etc. etc. etc. With so much doom and gloom in the air, there is no reason to invest wealth, rather than consume it. Robert Schiller touched on this at a recent talk at LSE.
3. The popular culture of 2015 America is – as in so many other areas - a tale of two cultural cities. For many of those who consume the bottom layers of it, what they are ingesting is a barbarous Pink Slime cultural sludge that makes them stupid, frivolous, dependent, impulsive and emotionally erratic – something like perpetual 15 year olds. People like this can be duped by the most shallow demagoguery and consumerist manipulation, and can't organize themselves to pursue their enlightened self-interest. Enlightened artists and cultural custodians need to step up, organize and find a way to seize the American mind back from the clutches of consumer capitalist garbage-mongers and philistine society-wreckers.
4. Laissez faire backwardness. We are struggling under left-right-center conspiracy of Pollyanna freedom fools, who despite their constant kvetching at one another all share in common the view that progress is self-organizing.
On the left we have the Chomsky and Graeber-style "libertarian socialists" who are convinced we could have a functioning and prosperous society in which seemingly every action is voluntary and spontaneous, nobody is ever compelled to do anything that their delicate little hearts don't throb to do, and who seemingly have no idea of what it takes even to run a carrot farm.
On the right, we have the clueless paranoid libertarians who think the whole world should revolve around their adolescent desire not to be "tread on", and seem to have no idea of what it takes – and what it took historically - to build a livable civilization.
In the center, we have the neoliberals, who are convinced that our world will spontaneously and beneficially organize itself if only we turn the macroeconomic tumblers and stumble on the right interest rate, or inflation rate, or some other version of the One Parameter to Rule Them All mindset. They are also too devoted to the religion of demand-goosing: the idea that everything will be all right as long as we generate enough "demand" – as though it makes no difference whether people are demanding high fructose cotton candy or the collected works of Shakespeare.
5. I'm an optimist! This is all going to change. We have nearly reached Peak Idiocracy. We're on the verge of a new age of social organization and planning and a return to mixed economy common sense and public-spirited mobilization and adulthood. This will happen because ultimately all of those teenagers will stop denying reality, and stop struggling to escape the realization that a more organized and thoughtfully planned way of life is the only thing that will work in our small, resource strapped, crowded 21st century planet.
George H. Blackford:likbez:
Since the 80s, US companies have been buying abroad to sell at home as foreign countries used our trade deficits to depress their exchange rates. Profits and income share at the top soared; wages and income share at the bottom fell, and employment was maintained by speculative bubbles and increasing debt until the last bubble burst, and the system collapsed.
There seem to be no more bubbles in the offing. The dollar is overvalued. Debt relative to income is unprecedented, and the concentration of income has created stagnation for lack of investment opportunities.
How is an increasing deficit and QE supposed to solve our problems in this situation other than by propping up a failed system that makes the rich richer and the poor poorer by increasing government debt? Does anyone really believe this sort of thing can go on forever in the absence of a fall in the value of the dollar and in the concentration of income? Who's going to be left holding the bag when this system collapses again?
It seems quite clear to me that it is going to take a very long time for the system to adjust to this situation in the absence of a fall in the value of the dollar and the concentration of income. That kind of adjustment means reallocating resources in a very dramatic way so as to accommodate an economy in which resources are allocated to serve the demands of the wealthy few in the absence of the ability of those at the bottom to expand their debt relative to income.
We didn't smoothly transition from an agricultural economy to one based on manufacturing. That transition was plagued with a great deal of civil unrest, speculative bubbles, booms and busts that eventually led to a collapse of the system and the Great Depression.
And we didn't smoothly transition out of the Great Depression. That was ended by WW II and dramatic changes in our economic system, the most dramatic changes being the role and size of government and the fall in the concentration of income for thirty-five years after 1940.
It was the fall in the concentration of income that led to mass markets (large numbers of people with purchasing power out of income) that made investment profitable after WW II in the absence of speculative bubbles, and it was the increase in the concentration of income that led to the bubble economy we have today that has led us into the Great Recession.
What this means to me is that we are not going to get out of the mess we are in today in the absence of some kind of catastrophe comparable to WW II if we, and the rest of the world, do not come to grips with the fundamental problem we face in this modern age, namely, the trade deficit and the concentration of income.
I think neoliberalism naturally leads to secular stagnation. This is the way any economic system that is based on increasing of inequality should behave: after inequality reached certain critical threshold, the economy faces extended period of low growth reflecting persistently weak private demand.
An economic cycle enters recession when total spending falls below expected by producers and they realize that production level is too high relative to demand. What we have under neoliberalism is kind of Marx constant crisis of overproduction.
The focus on monetary policy and the failure to enact fiscal policy options is structural defect of neoliberalism ideology and can't be changed unless neoliberal ideology is abandoned. Which probably will not happen unless another huge crisis hit the USA. 2008 crisis, while discrediting neoliberalism, was clearly not enough for the abandonment of this ideology. Like in most cults adherents became more fanatical believers after the prophecy did not materialized.
The USA elite tried partially alleviate this problem by resorting to military Keynesianism as a supplementary strategy. But while military budget was raised to unprecedented levels, it can't reverse the tendency. Persistent high output gap is now a feature of the US economy, not a transitory state.
"Top everything" does not help iether (top cheap oil is especially nasty factor). Recent pretty clever chess gambit to artificially drop oil price playing Russian card, and sacrificing US shall industry like a pawn (remember that Saudi Arabia is the USA client state) was a very interesting move, but still expectation are now so low that cheap gas stimulus did not work as expected in the USA. It would be interesting to see how quickly oil will return to early 2014 price level because of that. That will be the sign that gambit is abandoned.
In a way behaviour of the USA elite in this respect is as irrational as behavior of the USSR elite. My impression is that they will stick to neoliberal ideology to the bitter end. But at the same time they are much more reckless. Recent attempt to solve economic problems by unleashing a new wars and relying of war time mobilization so far did not work. Including the last move is this game: Russia did not bite the offer for military confrontation that the USA clearly made by instilling coup d'état in Ukraine.
Now it look like there is a second attempt to play "madman" card after Nixon's administration Vietnam attempt to obtain concession from the USSR by threatening to unleash the nuclear war.
Oct 30, 2017 | crookedtimber.org
It was Open Access week last week, but I was too busy trying to meet the deadline today for submitting my book manuscript to Open Book Publishers . That sounds like a good excuse if one cares about open access, right? I slept too little for too many days, so don't expect any creative thoughts or subtle analyses from me tonight. But here's two interesting things I discovered while having a look on the web figuring out whether anything interesting happend during Open Access week.
First, Cambridge University digitalised the PhD dissertation of Stephen Hawking and put it online. Apparently the website crashed when that got announced. Any Cambridge University alumni who want to make their PhD dissertation Open Access are invited doing so (no more need to go to the reading room and sign a fat notebook that one has accessed a particular PhD dissertation, as I once did. Although, I should confess, it felt like an adventure. But it's highly inefficient obviously).
Second, for some weeks now, Open Book Publishers has been offering the PDFs of all of their books open access, to celebrate the 100th book they published (their regular regime is to have the books as html open access and selling the PDFs for a few pounds, or else the author can pay a fee for making the PDF open access).
Importantly, this may only last for another a day or two (I am drawing from my memory when I saw a tweet on that about two months ago), so while it lasts it may be worth checking out their collection of books in the humanities and the social sciences, such as Naom Chomsky's Delhi Lectures , Ruth Finnegan's book on Oral literature in Africa or textbooks on maths for university .
All for nothing. Because, as their slogan goes, knowledge is for sharing .
ccc 10.30.17 at 10:54 pm ( 1 )Worth mentioning in this context: the CORE project released the final version of their impressive economics textbook "The Economy", freely (as in CC by-nc-dd licensed) available at http://www.core-econ.org/the-economy/Ingrid Robeyns 10.31.17 at 7:25 am ( 2 )
A great writeup about it by Samuel Bowles and Wendy Carlin (two of the authors) is here
http://voxeu.org/article/new-paradigm-introductory-course-economicsthanks ccc! I didn't know about this and it looks great.Steve 10.31.17 at 11:32 am ( 3 )
Anyone should feel free to post other major "Open Access week additions" in this thread.I think that having open access publishers is great, and I would love to have books published this way. Here's the concern: I suspect that my University's promotions committee, etc, will view this kind of publication as "inferior" to one with some snazzy University Press.Harry 10.31.17 at 1:23 pm ( 4 )
I was wondering whether anyone has any advice about how to handle the fact that there are perverse incentives to publish your work in a format which will cost someone £70, rather than for free?I don't see a way of changing the situation Steve mentions except by having well established scholars who don't need to worry about those kinds of thing take the lead. Eg, Ingrid. and David Velleman (who has two books with Open Book, which I greedily downloaded). And Sam Bowles! -- thanks for the tip ccc, I knew about this from Bowles and had seen parts of it, but not the whole thing which looks great!Ingrid Robeyns 10.31.17 at 6:31 pm ( 5 )Steve, I fully understand the worry – and even for me (tenured full professor) there is a "status cost" to be paid by not publishing with an established University Press. But it's a vicious circle that has to be broken – and I agree with Harry, that those of us who can "afford" to publish Open Access, should do so, in order to try to contribute to the status of the Open Access Press.SusanC 10.31.17 at 7:45 pm ( 6 )
I should say that in terms of refereeing – I've published two co-edited books, one with OUP, one with CUP – and the refereeing process at Open Books was the same, if not better. And a very important advantage of publishing with a publisher such as Open Books is the much shorter time between delivering the final manuscript and publication – if you do all your work properly, it's a matter of weeks or a few months, not, as with the established University Presses, (almost) a year (I've always wondered what the hell happens in that year, especially if they turn back the proofs which are full with typo's!)
I've been thinking someone should write a paper with the title: "If you have tenure, why don't you publish Open Access?"@3,4: Possibly the switch to open access needs to be done at an institutional level, rather than by individuals.John Quiggin 11.02.17 at 7:46 am ( 7 )
e.g. A declaration by government evaluations such as the REF that publications won't be counted unless they are open access, followed by a declaration by your department that publications from now onwards won't be counted for promotions unless they are open access, might create the right incentives.
[There are potential issues regarding fairness towards academics who are moving between universities . how do you fairly compare job candidates when one is from a university that demanded open access publication, and another is from a university that didn't?]
Not to make too much of the obvious, given that I'm writing a blog comment, but blogs offer some great opportunities here.
CT readers got to see nearly all of Zombie Economics before the book appeared, and if I ever finish Economics in Two Lessons it will be long after much of it was posted here.
Mar 20, 2011 | naked capitalism
Very good post. Thank you.
Over the past three decades, large parts of our culture here in the US have internalized the lessons of the new Social Darwinism, with a significant body of literature to explain and justify it. Many of us have internalized, without even realizing it, the ideas of "dog eat dog", "every man for himself", "society should be structured like the animal kingdom, where the weak and sick simply die because they cannot compete, and this is healthy", and "everything that happens to you is your own fault. There is no such thing as circumstance that cannot be overcome, and certainly no birth lottery."
The levers pulled by politicians and the Fed put these things into practice, but even if we managed get different (better) politicians or Fed chairmen, ones who weren't steeped in this culture and ideology, we'd still be left with the culture in the population at large, and things like the "unemployed stigma" are likely to die very, very hard. Acceptance of the "just-world phenomenon" here in the US runs deep.
"Religion is just as vulnerable to corporate capture as is the government or the academy."
This is rather rhetorical statement, and wrong one. One need to discern spiritual aspect of religion from the religion as a tool.
Religion, as is structured, is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institutions such as Supreme – and non-supreme – Court(s). It is a form of PR of the ruling class for the governing class.
Religion, just like human nature, is not that easy to put in a box.
For every example you can cite where religion "is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institution," I can point to an example of where religion engendered a liberating, emancipatory and revolutionary spirit.
•Early Christianity •Nominalism •Early Protestantism •Gandhi •Martin Luther King
Now granted, there don't seem to be any recent examples of this of any note, unless we consider Chris Hedges a religionist, which I'm not sure we can do. Would it be appropriate to consider Hedges a religionist?
Yes, that maybe, just maybe be the case in early stages of forming new religion(s). In case of Christianity old rulers from Rome were trying to save own head/throne and the S.P.Q.R. imperia by adopting new religion.
You use examples of Gandhi and MLK which is highly questionable both were fighters for independence and the second, civil rights. In a word: not members of establishment just as I said there were (probably) seeing the religion as spiritual force not tool of enslavement.
This link may provide some context:
In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero
Poll after poll after poll has shown that a majority of Americans, and a rather significant majority, reject the values, attitudes, beliefs and opinions proselytized by the stealth religion we call "neoclassical economics."
That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population.
The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is.
The politicians love this, because as they carry water for their pet corporations, they can point to the Tea Partiers and say: "See what a huge upwelling of popular support I am responding to."
Well, if that's true, then the unemployed are employable but the mass mediated mentality would like them to believe they are literally and inherently unemployable so that they underestimate and under-sell themselves.
This is as much to the benefit of those who would like to pick up "damaged goods" on the cheap as those who promote the unemployment problem as one that inheres in prospective employees rather than one that is a byproduct of a bad job market lest someone be tempted to think we should address it politically.
That's where I see this blame the unemployed finger pointing really getting traction these days.
I apologize for the fact that I only read the first few paragraphs of this before quitting in disgust.
I just can no longer abide the notion that "labor" can ever be seen by human beings as a "cost" at all. We really need to refuse to even tolerate that way of phrasing things. Workers create all wealth. Parasites have no right to exist. These are facts, and we should refuse to let argument range beyond them.
The only purpose of civilization is to provide a better way of living and for all people. This includes the right and full opportunity to work and manage for oneself and/or as a cooperative group. If civilization doesn't do that, we're better off without it.
I am one of those long term unemployed.
I suppose my biggest employment claim would be as some sort of IT techie, with numerous supply chain systems and component design, development, implementation, interfaces with other systems and ongoing support. CCNP certification and a history of techiedom going back to WEYCOS.
I have a patent (6,209,954) in my name and 12+ years of beating my head against the wall in an industry that buys compliance with the "there is no problem here, move on now" approach.
Hell, I was a junior woodchuck program administrator back in the early 70's working for the Office of the Governor of the state of Washington on CETA PSE or Public Service Employment. The office of the Governor ran the PSE program for 32 of the 39 counties in the state that were not big enough to run their own. I helped organize the project approval process in all those counties to hire folk at ( if memory serves me max of $833/mo.) to fix and expand parks and provide social and other government services as defined projects with end dates. If we didn't have the anti-public congress and other government leadership we have this could be a current component in a rational labor policy but I digress.
I have experience in the construction trades mostly as carpenter but some electrical, plumbing, HVAC, etc. also.
So, of course there is some sort of character flaw that is keeping me and all those others from employment ..right. I may have more of an excuse than others, have paid into SS for 45 years but still would work if it was available ..taking work away from other who may need it more .why set up a society where we have to compete as such for mere existence???????
One more face to this rant. We need government by the people and for the people which we do not have now. Good, public focused, not corporate focused government is bigger than any entities that exist under its jurisdiction and is kept updated by required public participation in elections and potentially other things like military, peace corps, etc. in exchange for advanced education. I say this as someone who has worked at various levels in both the public and private sectors there are ignorant and misguided folks everywhere. At least with ongoing active participation there is a chance that government would, once constructed, be able to evolve as needed within public focus .IMO.
Some people would say I have been unemployed for 10 years. In 2000 after losing the last of my four CFO gigs for public companies I found it necessary to start consulting. This has lead to two of my three biggest winning years. I am usually consulting on cutting edge area of my profession and many times have large staffs reporting to me that I bring on board to get jobs done. For several years I subcontacted to a large international consulting firm to clean up projects which went wrong. Let me give some insight here.
- First, most good positions have gate keepers who are professional recruiters. It is near impossible to get by them and if you are unemployed they will hardly talk to you. One time talking to a recruiter at Korn Fery I was interviewing for a job I have done several times in an industry I have worked in several times. She made a statement that I had never worked at a well known company. I just about fell out of my chair laughing. At one time I was a senior level executive for the largest consulting firm in the world and lived on three continents and worked with companies on six. In addition, I had held senior positions for 2 fortune 500 firms and was the CFO for a company with $4.5 billion in revenue. I am well known at several PE firms and the founder of one of the largest mentioned in a meeting that one of his great mistakes was not investing in a very successful LBO (return of in excess of 20 multiple to investors in 18 months) I was the CFO for. In a word most recruiters are incompetent.
- Second, most CEO's any more are just insecure politicians. One time during an interview I had a CEO asked me to talk about some accomplishments. I was not paying to much attention as I rattled off accomplishments and the CEO went nuclear and started yelling at me that he did not know where I thought I was going with this job but the only position above the CFO job was his and he was not going anywhere. I assured him I was only interested in the CFO position and not his, but I knew the job was over. Twice feed back that I got from recruiters which they took at criticism was the "client said I seemed very assured of myself."
- Third, government, banking, business and the top MBA schools are based upon lying to move forward. I remember a top human resource executive telling me right before Enron, MCI and Sarbanes Oxley that I needed to learn to be more flexible. My response was that flexibility would get me an orange jump suit. Don't get me wrong, I have a wide grey zone, but it use to be in business the looked for people who could identify problems early and resolve them. Now days I see far more of a demand for people who can come up with PR spins to hide them. An attorney/treasurer consultant who partnered with me on a number of consulting jobs told me some one called me "not very charming." He said he asked what that meant, and the person who said that said, "Ish walks into a meeting and within 10 minutes he is asking about the 10,000 pound guerilla sitting in the room that no one wants to talk about." CEO do not want any challenges in their organization.
- Fourth, three above has lead to the hiring of very young and inexperienced people at senior levels. These people are insecure and do not want more senior and experienced people above them and than has resulted in people older than 45 not finding positions.
- Fifth, people are considered expendable and are fired for the lamest reasons anymore. A partner at one of the larger and more prestigious recruiting firms one time told me, "If you have a good consulting business, just stick with it. Our average placement does not last 18 months any more." Another well known recruiter in S. Cal. one time commented to me, "Your average consulting gig runs longer than our average placement."
With all of that said, I have a hard time understanding such statements as "@attempter "Workers create all wealth. Parasites have no right to exist." What does that mean? Every worker creates wealth. There is no difference in people. Sounds like communism to me. I make a good living and my net worth has grown working for myself. I have never had a consulting gig terminated by the client but I have terminated several. Usually, I am brought in to fix what several other people have failed at. I deliver basically intellectual properties to companies. Does that mean I am not a worker. I do not usually lift anything heavy or move equipment but I tell people what and where to do it so does that make me a parasite.
Those people who think everyone is equal and everyone deserves equal pay are fools or lazy. My rate is high, but what usually starts as short term projects usually run 6 months or more because companies find I can do so much more than what most of their staff can do and I am not a threat.
I would again like to have a senior challenging role at a decent size company but due to the reasons above will probably never get one. However, you can never tell. I am currently consulting for a midsize very profitable company (grew 400% last year) where I am twice the age of most people there, but everyone speaks to me with respect so you can never tell.
Ishmael, you're quite right. When I showed my Italian husband's resume to try and "network" in the US, my IT friends assumed he was lying about his skills and work history.
Contemporaneously, in Italy it is impossible to get a job because of incentives to hire "youth". Age discrimination is not illegal, so it's quite common to see ads that ask for a programmer under 30 with 5 years of experience in COBOL (the purple squirrel).
Some good points about the foolishness of recruiters, but a great deal of that foolishness is forced by the clients themselves. I used to be a recruiter myself, including at Korn Ferry in Southern California. I described the recruiting industry as "yet more proof that God hates poor people" because my job was to ignore resumes from people seeking jobs and instead "source" aka "poach" people who already had good jobs by dangling a higher salary in front of them. I didn't do it because I disparaged the unemployed, or because I could not do the basic analysis to show that a candidate had analogous or transferrable skills to the opening.
I did it because the client, as Yves said, wanted people who were literally in the same job description already. My theory is that the client wanted to have their ass covered in case the hire didn't work out, by being able to say that they looked perfect "on paper." The lesson I learned for myself and my friends looking for jobs was simple, if morally dubious. Basically, that if prospective employers are going to judge you based on a single piece of paper take full advantage of the fact that you get to write that piece of paper yourself.
Hosswire - I agree with your comment. There are poor recruiters like the one I sited but in general it is the clients fault. Fear of failure. All hires have at least a 50% chance of going sideways on you. Most companies do not even have the ability to look at a resume nor to interview. I did not mean to same nasty things about recruiters, and I even do it sometimes but mine.
I look at failure in a different light than most companies. You need to be continually experimenting and changing to survive as a company and there will be some failures. The goal is to control the cost of failures while looking for the big pay off on a winner.
As a former recruiter and HR "professional" (I use that term very loosely for obvious reasons), I can honestly say that you nailed it. Most big companies looking for mid to high level white collar "talent" will almost always take the perceived safest route by hiring those who look the best ON PAPER and in a suit and lack any real interviewing skills to find the real stars. What's almost comical is that companies almost always want to see the most linear resume possible because they want to see "job stability" (e.g. a CYA document in case the person fails in that job) when in many cases nobody cares about the long range view of the company anyway. My question was why should the candidate or employee care about the long range view if the employer clearly doesn't?
Manwhich another on point comment. Sometimes either interviewing for a job or consulting with a CEO it starts getting to the absurd. I see all the time the requirement for stability in a persons background. Hello, where have they been the last 15 years. In addition, the higher up you go the more likely you will be terminated sometime and that is especially true if you are hired from outside the orgnanization. Companies want loyalty from an employee but offer none in return.
The average tenure for a CFO anymore is something around 18 months. I have been a first party participant (more than once) where I went through an endless recruiting process for a company (lasting more than 6 months) they final hire some one and that person is with the company for 3 months and then resigns (of course we all know it is through mutual agreement).
The real problem has become and maybe this is what you are referring to is the "Crony Capitalism." We have lost control of our financial situation. Basically, PE is not the gods of the universe that everyone thinks they are. However, every bankers secret wet dream is to become a private equity guy. Accordingly, bankers make ridiculous loans to PE because if you say no to them then you can not play in their sand box any more. Since the govt will not let the banks go bankrupt like they should then this charade continues inslaving everyone.
This country as well as many others has a large percentage of its assets tied up in over priced deals that the bankers/governments will not let collapse while the blood sucking vampires suck the life out of the assets.
On the other hand, govt is not the answer. Govt is too large and accomplishes too little.
kevin de bruxelles:
The harsh reality is that, at least in the first few rounds, companies kick to the curb their weakest links and perceived slackers. Therefore when it comes time to hire again, they are loath to go sloppy seconds on what they perceive to be some other company's rejects. They would much rather hire someone who survived the layoffs working in a similar position in a similar company. Of course the hiring company is going to have to pay for this privilege. Although not totally reliable, the fact that someone survived the layoffs provides a form social proof for their workplace abilities.
On the macro level, labor has been under attack for thirty years by off shoring and third world immigration. It is no surprise that since the working classes have been severely undermined that the middle classes would start to feel some pressure. By mass immigration and off-shoring are strongly supported by both parties. Only when the pain gets strong enough will enough people rebel and these two policies will be overturned. We still have a few years to go before this happens.
Let's say I run a factory. I produce cars and it requires very skilled work. Skilled welding, skilled machinists. Now I introduce some robotic welders and an assembly line system. The plants productivity improves and the jobs actually get easier. They require less skill, in fact I've simplified each task to something any idiot can do. Would wages go up or down? Are the workers really contributing to that increase in productivity or is it the machines and methods I created?
Lets say you think laying off or cutting the wages of my existing workers is wrong. What happens when a new entrant into the business employs a smaller workforce and lower wages, which they can do using the same technology? The new workers don't feel like they were cut down in any way, they are just happy to have a job. Before they couldn't get a job at the old plant because they lacked the skill, but now they can work in the new plant because the work is genuinely easier. Won't I go out of business?
I am 54 and have a ton of peers who are former white collar workers and professionals (project managers, architects, lighting designers, wholesalers and sales reps for industrial and construction materials and equipment) now out of work going on three years. Now I say out of work, I mean out of our trained and experienced fields.
We now work two or three gigs (waiting tables, mowing lawns, doing free lance, working in tourism, truck driving, moving company and fedex ups workers) and work HARD, for much much less than we did, and we are seeing the few jobs that are coming back on line going to younger workers. It is just the reality. And for most of us the descent has not been graceful, so our credit is a wreck, which also breeds a whole other level of issues as now it is common for the credit record to be a deal breaker for employment, housing, etc.
Strangely I don't sense a lot of anger or bitterness as much as humility. And gratitude for ANY work that comes our way. Health insurance? Retirement accounts? not so much.
Yves and I have disagreed on how extensive the postwar "pact" between management and labor was in this country. But if you drew a line from say, Trenton-Patterson, NJ to Cincinatti, OH to Minneapolis, MN, north and east of it where blue collar manufacturing in steel, rubber, auto, machinery, etc., predominated, this "pact" may have existed but ONLY because physical plant and production were concentrated there and workers could STOP production.
Outside of these heavy industrial pockets, unions were not always viewed favorably. As one moved into the rural hinterlands surrounding them there was jealously and/or outright hostility. Elsewhere, especially in the South "unions" were the exception not the rule. The differences between NE Ohio before 1975 – line from Youngstown to Toledo – and the rest of the state exemplified this pattern. Even today, the NE counties of Ohio are traditional Democratic strongholds with the rest of the state largely Republican. And I suspect this pattern existed elsewhere. But it is changing too
In any case, the demonization of the unemployed is just one notch above the vicious demonization of the poor that has always existed in this country. It's a constant reminder for those still working that you could be next – cast out into the darkness – because you "failed" or worse yet, SINNED. This internalization of the "inner cop" reinforces the dominant ideology in two ways. First, it makes any resistance by individuals still employed less likely. Second, it pits those still working against those who aren't, both of which work against the formation of any significant class consciousness amongst working people. The "oppressed" very often internalize the value system of the oppressor.
As a nation of immigrants ETHNICITY may have more explanatory power than CLASS. For increasingly, it would appear that the dominant ethnic group – suburban, white, European Americans – have thrown their lot in with corporate America. Scared of the prospect of downward social mobility and constantly reminded of URBAN America – the other America – this group is trapped with nowhere to else to go.
It's the divide and conquer strategy employed by ruling elites in this country since its founding [Federalist #10] with the Know Nothings, blaming the Irish [NINA - no Irish need apply] and playing off each successive wave of immigrants against the next. Only when the forces of production became concentrated in the urban industrial enclaves of the North was this strategy less effective. And even then internal immigration by Blacks to the North in search of employment blunted the formation of class consciousness among white ethnic industrial workers.
Wherever the postwar "pact of domination" between unions and management held sway, once physical plant was relocated elsewhere [SOUTH] and eventually offshored, unemployment began to trend upwards. First it was the "rustbelt" now it's a nationwide phenomenon. Needless to say, the "pact" between labor and management has been consigned to the dustbin of history.
White, suburban America has hitched its wagon to that of the corporate horse. Demonization of the unemployed coupled with demonization of the poor only serve to terrorize this ethnic group into acquiescence. And as the workplace becomes a multicultural matrix this ethnic group is constantly reminded of its perilous state. Until this increasingly atomized ethnic group breaks with corporate America once and for all, it's unlikely that the most debilitating scourge of all working people – UNEMPLOYMENT – will be addressed.
Make no mistake about it, involuntary UNEMPLOYMENT/UNDEREMPLYEMT is a form of terrorism and its demonization is terrorism in action. This "quiet violence" is psychological and the intimidation wrought by unemployment and/or the threat of it is intended to dehumanize individuals subjected to it. Much like spousal abuse, the emotional and psychological effects are experienced way before any physical violence. It's the inner cop that makes overt repression unnecessary. We terrorize ourselves into submission without even knowing it because we accept it or come to tolerate it. So long as we accept "unemployment" as an inevitable consequence of progress, as something unfortunate but inevitable, we will continue to travel down the road to serfdom where ARBEIT MACHT FREI!
FULL and GAINFUL EMPLOYMENT are the ultimate labor power.
It's delicate since direct age discrimination is illegal, but when circumstances permit separating older workers they have a very tough time getting back into the workforce in an era of high health care inflation. Older folks consume more health care and if you are hiring from a huge surplus of available workers it isn't hard to steer around the more experienced. And nobody gets younger, so when you don't get job A and go for job B 2 weeks later you, you're older still!
Yves said- "This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills"
In the IT job markets such postings are often called purple squirrels. The HR departments require the applicant to be expert in a dozen programming languages. This is an excuse to hire a foreigner on a temp h1-b or other visa.
Most people aren't aware that this model dominates the sciences. Politicians scream we have a shortage of scientists, yet it seems we only have a shortage of cheap easily exploitable labor. The economist recently pointed out the glut of scientists that currently exists in the USA.
This understates the problem. The majority of PhD recipients wander through years of postdocs only to end up eventually changing fields. My observation is that the top ten schools in biochem/chemistry/physics/ biology produce enough scientists to satisfy the national demand.
The exemption from h1-b visa caps for academic institutions exacerbates the problem, providing academics with almost unlimited access to labor.
The pharmaceutical sector has been decimated over the last ten years with tens of thousands of scientists/ factory workers looking for re-training in a dwindling pool of jobs (most of which will deem you overqualified.)
I wonder how the demonization of the unemployed can be so strong even in the face of close to 10% unemployment/20% underemployment. It's easy and tempting to demonize an abstract young buck or Cadillac-driving welfare queen, but when a family member or a close friend loses a job, or your kids are stuck at your place because they can't find one, shouldn't that alter your perceptions? Of course the tendency will be to blame it all on the government, but there has to be a limit to that in hard-hit places like Ohio, Colorado, or Arizona. And yet, the dynamics aren't changing or even getting worse. Maybe Wisconsin marks a turning point, I certainly hope it does
It's more than just stupid recruiting, this stigma. Having got out when the getting was good, years ago, I know that any corporate functionary would be insane to hire me now. Socialization wears off, the deformation process reverses, and the ritual and shibboleths become a joke. Even before I bailed I became a huge pain in the ass as economic exigency receded, every bosses nightmare. I suffered fools less gladly and did the right thing out of sheer anarchic malice.
You really can't maintain corporate culture without existential fear – not just, "Uh oh, I'm gonna get fired," fear, but a visceral feeling that you do not exist without a job. In properly indoctrinated workers that feeling is divorced from economic necessity. So anyone who's survived outside a while is bound to be suspect. That's a sign of economic security, and security of any sort undermines social control.
You hit the proverbial nail with that reply. (Although, sorry, doing the right thing should not be done out of malice) The real fit has to be in the corporate yes-man culture (malleable ass kisser) to be suited for any executive position and beyond that it is the willingness to be manipulated and drained to be able to keep a job in lower echelon.
This is the new age of evolution in the work place. The class wars will make it more of an eventual revolution, but it is coming. The unemployment rate (the actual one, not the Government one) globalization and off shore hiring are not sustainable for much longer.
Something has to give, but it is more likely to snap then to come easily. People who are made to be repressed and down and out eventually find the courage to fight back and by then, it is usually not with words.
down and out in Slicon Valley:
This is the response I got from a recruiter:
"I'm going to be overly honest with you. My firm doesn't allow me to submit any candidate who hasn't worked in 6-12 months or more. Recruiting brokers are probably all similar in that way . You are going to have to go through a connection/relationship you have with a colleague, co-worker, past manager or friend to get your next job .that's my advice for you. Best of luck "
I'm 56 years old with MSEE. Gained 20+ years of experience at the best of the best (TRW, Nortel, Microsoft), have been issued a patent. Where do I sign up to gain skills required to find a job now?
Litton Graft :
"Best of the Best?" I know you're down now, but looking back at these Gov'mint contractors you've enjoyed the best socialism money can by.
Nortel/TRW bills/(ed) the Guvmint at 2x, 3x your salary, you can ride this for decades. At the same time the Inc is attached to the Guvmint ATM localities/counties are giving them a red carpet of total freedom from taxation. Double subsidies.
I've worked many years at the big boy bandits, and there is no delusion in my mind that almost anyone, can do what I do and get paid 100K+. I've never understood the mindset of some folks who work in the Wermacht Inc: "Well, someone has to do this work" or worse "What we do, no one else can do" The reason no one else "can do it" is that they are not allowed to. So, we steal from the poor to build fighter jets, write code or network an agency.
I used to work as a recruiter and can tell you that I only parroted the things my clients told me. I wanted to get you hired, because I was lazy and didn't want to have to talk to someone else next.
So what do you do? To place you that recruiter needs to see on a piece of paper that you are currently working? Maybe get an email or phone call from someone who will vouch for your employment history. That should not be that hard to make happen.
Francois T :
The "bizarre way that companies now spec jobs" is essentially a coded way for mediocre managers to say without saying so explicitly that "we can afford to be extremely picky, and by God, we shall do so no matter what, because we can!"
Of course, when comes the time to hire back because, oh disaster! business is picking up again, (I'm barely caricaturing here; some managers become despondent when they realize that workers regain a bit of the higher ground; loss of power does that to lesser beings) the same idiots who designed those "overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" are thrown into a tailspin of despair and misery. Instead of figuring out something as simple as "if demand is better, so will our business", they can't see anything else than the (eeeek!) cost of hiring workers. Unable to break their mental corset of penny-pincher, they fail to realize that lack of qualified workers will prevent them to execute well to begin with.
And guess what: qualified workers cost money, qualified workers urgently needed cost much more.
This managerial attitude must be another factor that explain why entrepreneurship and the formation of small businesses is on the decline in the US (contrary to the confabulations of the US officialdumb and the chattering class) while rising in Europe and India/China.
If you are 55-60, worked as a professional (i.e., engineering say) and are now unemployed you are dead meat. Sorry to be blunt but thats the way it is in the US today. Let me repeat that : Dead Meat.
I was terminated at age 59, found absolutely NOTHING even though my qualifications were outstanding. Fortunately, my company had an old style pension plan which I was able to qualify for (at age 62 without reduced benefits). So for the next 2+ years my wife and I survived on unemployment insurance, severance, accumulated vacation pay and odd jobs. Not nice – actually, a living hell.
At age 62, I applied for my pension, early social security, sold our old house (at a good profit) just before the RE crash, moved back to our home state. Then my wife qualified for social security also. Our total income is now well above the US median.
Today, someone looking at us would think we were the typical corporate retiree. We surely don't let on any differently but the experience (to get to this point) almost killed us.
I sympathize very strongly with the millions caught in this unemployment death spiral. I wish I had an answer but I just don't. We were very lucky to survive intact.
Thank you Yves for your excellent post, and for bringing to light this crucial issue.
Thank you to all the bloggers, who add to the richness of the this discussion.
I wonder if you could comment on this Yves, and correct me if I am wrong I believe that the power of labor was sapped by the massive available supply of global labor. The favorable economic policies enacted by China (both official and unofficial), and trade negotiations between the US government and the Chinese government were critical to creating the massive supply of labor.
Thank you. No rush of course.
There are some odd comments and notions here that are used to support dogma and positions of prejudice. The world can be viewed in a number of ways. Firstly from a highly individualised and personal perspective – that is what has happened to me and here are my experiences. Or alternatively the world can be viewed from a broader societal perspective.
In the context of labour there has always been an unequal confrontation between those that control capital and those that offer their labour, contrary to some of the views exposed here – Marx was a first and foremost a political economist. The political economist seeks to understand the interplay of production, supply, the state and institutions like the media. Modern day economics branched off from political economy and has little value in explaining the real world as the complexity of the world has been reduced to a simplistic rationalistic model of human behaviour underpinned by other equally simplistic notions of 'supply and demand', which are in turn represented by mathematical models, which in themselves are complex but merely represent what is a simplistic view of the way the world operates. This dogmatic thinking has avoided the need to create an underpinning epistemology. This in turn underpins the notion of free choice and individualism which in itself is an illusion as it ignores the operation of the modern state and the exercise of power and influence within society.
It was stated in one of the comments that the use of capital (machines, robotics, CAD design, etc.) de-skills. This is hardly the case as skills rise for those that remain and support highly automated/continuous production factories. This is symptomatic of the owners of capital wanting to extract the maximum value for labour and this is done via the substitution of labour for capital making the labour that remains to run factories highly productive thus eliminating low skill jobs that have been picked up via services (people move into non productive low skilled occupations warehousing and retail distribution, fast food outlets, etc). Of course the worker does not realise the additional value of his or her labour as this is expropriated for the shareholders (including management as shareholders).
The issue of the US is that since the end of WW2 it is not the industrialists that have called the shots and made investments it is the financial calculus of the investment banker (Finance Capital). Other comments have tried to ignore the existence of the elites in society – I would suggest that you read C.W.Mills – The Power Elites as an analysis of how power is exercised in the US – it is not through the will of the people.
For Finance capital investments are not made on the basis of value add, or contribution through product innovation and the exchange of goods but on basis of the lowest cost inputs. Consequently, the 'elites' that make investment decisions, as they control all forms of capital seek to gain access to the cheapest cost inputs. The reality is that the US worker (a pool of 150m) is now part of a global labour pool of a couple of billion that now includes India and China. This means that the elites, US transnational corporations for instance, can access both cheaper labour pools, relocate capital and avoid worker protection (health and safety is not a concern). The strategies of moving factories via off-shoring (over 40,000 US factories closed or relocated) and out-sourcing/in-sourcing labour is also a representations of this.
The consequence for the US is that the need for domestic labour has diminished and been substituted by cheap labour to extract the arbitrage between US labour rates and those of Chinese and Indians. Ironically, in this context capital has become too successful as the mode of consumption in the US shifted from workers that were notionally the people that created the goods, earned wages and then purchased the goods they created to a new model where the worker was substituted by the consumer underpinned by cheap debt and low cost imports – it is illustrative to note that real wages have not increased in the US since the early 1970's while at the same time debt has steadily increased to underpin the illusion of wealth – the 'borrow today and pay tomorrow' mode of capitalist operation. This model of operation is now broken. The labour force is now being demonized as there is a now surplus of labour and a need to drive down labour rates through changes in legislation and austerity programs to meet those of the emerging Chinese and Indian middle class so workers rights need to be broken. Once this is done a process of in-source may take place as US labour costs will be on par with overseas labour pools.
It is ironic that during the Regan administration a number of strategic thinkers saw the threat from emerging economies and the danger of Finance Capital and created 'Project Socrates' that would have sought to re-orientate the US economy from one that was based on the rationale of Finance Capital to one that focused in productive innovation which entailed an alignment of capital investment, research and training to product innovative goods. Of course this was ignored and the rest is history. The race to the lowest input cost is ultimately self defeating as it is clear that the economy de-industrialises through labour and capital changes and living standards collapse. The elites – bankers, US transnational corporations, media, industrial military complex and the politicians don't care as they make money either way and this way you get other people overseas to work cheap for you.
Neoliberal orthodoxy treats unemployment as well as wage supression as a necessary means to fight "inflation." If there was too much power in the hands of organized labor, inflationary pressures would spiral out of control as supply of goods cannot keep up with demand.
It also treats the printing press as a necessary means to fight "deflation."
So our present scenario: widespread unemployment along with QE to infinity, food stamps for all, is exactly what you'd expect.
The problem with this orthodoxy is that it assumes unlimited growth on a planet with finite resources, particularly oil and energy. Growth is not going to solve unemployment or wages, because we are bumping up against limits to growth.
There are only two solutions. One is tax the rich and capital gains, slow growth, and reinvest the surplus into jobs/skills programs, mostly to maintain existing infrastructure or build new energy infrastructure. Even liberals like Krugman skirt around this, because they aren't willing to accept that we have the reached the end of growth and we need radical redistribution measures.
The other solution is genuine classical liberalism / libertarianism, along the lines of Austrian thought. Return to sound money, and let the deflation naturally take care of the imbalances. Yes, it would be wrenching, but it would likely be wrenching for everybody, making it fair in a universal sense.
Neither of these options is palatable to the elite classes, the financiers of Wall Street, or the leeches and bureaucrats of D.C.
So this whole experiment called America will fail.
Jun 26, 2015 | naked capitalism
Yves here. In May, we wrote up and embedded the report on how NYU exploits students and adjuncts in "The Art of the Gouge": NYU as a Model for Predatory Higher Education. This article below uses that study as a point of departure for for its discussion of how higher education has become extractive.
By David Masciotra, the author of Mellencamp: American Troubadour (University Press of Kentucky). He has also written for Salon, the Atlantic and the Los Angeles Review of Books. For more information visit www.davidmasciotra.com. Originally published at Alternet
Higher education wears the cloak of liberalism, but in policy and practice, it can be a corrupt and cutthroat system of power and exploitation. It benefits immensely from right-wing McCarthy wannabes, who in an effort to restrict academic freedom and silence political dissent, depict universities as left-wing indoctrination centers.
But the reality is that while college administrators might affix "down with the man" stickers on their office doors, many prop up a system that is severely unfair to American students and professors, a shocking number of whom struggle to make ends meet. Even the most elementary level of political science instructs that politics is about power. Power, in America, is about money: who has it? Who does not have it? Who is accumulating it? Who is losing it? Where is it going?
Four hundred faculty members at New York University, one of the nation's most expensive schools, recently released a report on how their own place of employment, legally a nonprofit institution, has become a predatory business, hardly any different in ethical practice or economic procedure than a sleazy storefront payday loan operator. Its title succinctly summarizes the new intellectual discipline deans and regents have learned to master: "The Art of The Gouge."
The result of their investigation reads as if Charles Dickens and Franz Kafka collaborated on notes for a novel. Administrators not only continue to raise tuition at staggering rates, but they burden their students with inexplicable fees, high cost burdens and expensive requirements like mandatory study abroad programs. When students question the basis of their charges, much of them hidden during the enrollment and registration phases, they find themselves lost in a tornadic swirl of forms, automated answering services and other bureaucratic debris.
Often the additional fees add up to thousands of dollars, and that comes on top of the already hefty tuition, currently $46,000 per academic year, which is more than double its rate of 2001. Tuition at NYU is higher than most colleges, but a bachelor's degree, nearly anywhere else, still comes with a punitive price tag. According to the College Board, the average cost of tuition and fees for the 2014–2015 school year was $31,231 at private colleges, $9,139 for state residents at public colleges, and $22,958 for out-of-state residents attending public universities.
Robert Reich, in his book Supercapitalism, explains that in the past 30 years the two industries with the most excessive increases in prices are health care and higher education. Lack of affordable health care is a crime, Reich argues, but at least new medicines, medical technologies, surgeries, surgery techs, and specialists can partially account for inflation. Higher education can claim no costly infrastructural or operational developments to defend its sophisticated swindle of American families. It is a high-tech, multifaceted, but old fashioned transfer of wealth from the poor, working- and middle-classes to the rich.
Using student loan loot and tax subsidies backed by its $3.5 billion endowment, New York University has created a new administrative class of aristocratic compensation. The school not only continues to hire more administrators – many of whom the professors indict as having no visible value in improving the education for students bankrupting themselves to register for classes – but shamelessly increases the salaries of the academic administrative class. The top 21 administrators earn a combined total of $23,590,794 per year. The NYU portfolio includes many multi-million-dollar mansions and luxury condos, where deans and vice presidents live rent-free.
Meanwhile, NYU has spent billions, over the past 20 years, on largely unnecessary real estate projects, buying property and renovating buildings throughout New York. The professors' analysis, NYU's US News and World Report Ranking, and student reviews demonstrate that few of these extravagant projects, aimed mostly at pleasing wealthy donors, attracting media attention, and giving administrators opulent quarters, had any impact on overall educational quality.
As the managerial class grows, in size and salary, so does the full time faculty registry shrink. Use of part time instructors has soared to stratospheric heights at NYU. Adjunct instructors, despite having a minimum of a master's degree and often having a Ph.D., receive only miserly pay-per-course compensation for their work, and do not receive benefits. Many part-time college instructors must transform their lives into daily marathons, running from one school to the next, barely able to breathe between commutes and courses. Adjunct pay varies from school to school, but the average rate is $2,900 per course.
Many schools offer rates far below the average, most especially community colleges paying only $1,000 to $1,500. Even at the best paying schools, adjuncts, as part time employees, are rarely eligible for health insurance and other benefits. Many universities place strict limits on how many courses an instructor can teach. According to a recent study, 25 percent of adjuncts receive government assistance.
The actual scandal of "The Art of the Gouge" is that even if NYU is a particularly egregious offender of basic decency and honesty, most of the report's indictments could apply equally to nearly any American university. From 2003-2013, college tuition increased by a crushing 80 percent. That far outpaces all other inflation. The closest competitor was the cost of medical care, which in the same time period, increased by a rate of 49 percent. On average, tuition in America rises eight percent on an annual basis, placing it far outside the moral universe. Most European universities charge only marginal fees for attendance, and many of them are free. Senator Bernie Sanders recently introduced a bill proposing all public universities offer free education. It received little political support, and almost no media coverage.
In order to obtain an education, students accept the paralytic weight of student debt, the only form of debt not dischargeable in bankruptcy. Before a young person can even think about buying a car, house or starting a family, she leaves college with thousands of dollars in debt: an average of $29,400 in 2012. As colleges continue to suck their students dry of every dime, the US government profits at $41.3 billion per year by collecting interest on that debt. Congress recently cut funding for Pell Grants, yet increased the budget for hiring debt collectors to target delinquent student borrowers.
The university, once an incubator of ideas and entrance into opportunity, has mutated into a tabletop model of America's economic architecture, where the top one percent of income earners now owns 40 percent of the wealth.
"The One Percent at State U," an Institute for Policy Studies report, found that at the 25 public universities with the highest paid presidents, student debt and adjunct faculty increased at dramatically higher rates than at the average state university. Marjorie Wood, the study's co-author, explained told the New York Times that extravagant executive pay is the "tip of a very large iceberg, with universities that have top-heavy executive spending also having more adjuncts, more tuition increases and more administrative spending.
Unfortunately, students seem like passive participants in their own liquidation. An American student protest timeline for 2014-'15, compiled by historian Angus Johnston, reveals that most demonstrations and rallies focused on police violence, and sexism. Those issues should inspire vigilance and activism, but only 10 out of 160 protests targeted tuition hikes for attack, and only two of those 10 events took place outside the state of California.
Class consciousness and solidarity actually exist in Chile, where in 2011 a student movement began to organize, making demands for free college. More than mere theater, high school and college students, along with many of their parental allies, engaged the political system and made specific demands for inexpensive education. The Chilean government announced that in March 2016, it will eliminate all tuition from public universities. Chile's victory for participatory democracy, equality of opportunity and social justice should instruct and inspire Americans. Triumph over extortion and embezzlement is possible.
This seems unlikely to happen in a culture, however, where even most poor Americans view themselves, in the words of John Steinbeck, as "temporarily embarrassed millionaires." The political, educational and economic ruling class of America is comfortable selling out its progeny. In the words of one student quoted in "The Art of the Gouge," "they see me as nothing more than $200,000."washunate June 26, 2015 at 10:07 am
Awesome question in the headline.
At a basic level, I think the answer is yes, because on balance, college still provides a lot of privatized value to the individual. Being an exploited student with the College Credential Seal of Approval remains relatively much better than being an exploited non student lacking that all important seal. A college degree, for example, is practically a guarantee of avoiding the more unseemly parts of the US "justice" system.
But I think this is changing. The pressure is building from the bottom as academia loses credibility as an institution capable of, never mind interested in, serving the public good rather than simply being another profit center for connected workers. It's actually a pretty exciting time. The kiddos are getting pretty fed up, and the authoritarians at the top of the hierarchy are running out of money with which to buy off younger technocratic enablers and thought leaders and other Serious People.
washunate June 26, 2015 at 10:17 am
P.S., the author in this post demonstrates the very answer to the question. He assumes as true, without any need for support, that the very act of possessing a college degree makes one worthy of a better place in society. That mindset is why colleges can prey upon students. They hold a monopoly on access to resources in American society. My bold:
Adjunct instructors, despite having a minimum of a master's degree and often having a Ph.D., receive only miserly pay-per-course compensation for their work, and do not receive benefits.
What does having a masters degree or PhD have to do with the moral claim of all human beings to a life of dignity and purpose?
flora June 26, 2015 at 11:37 am
There are so many more job seekers per job opening now than, say, 20 or thirty years ago that a degree is used to sort out applications. Now a job that formerly listed a high school degree as a requirement may now list a college degree as a requirement, just to cut down on the number of applications.
So, no, a B.A. or B.S. doesn't confer moral worth, but it does open more job doors than a high school diploma, even if the actual work only requires high school level math, reading, science or technology.
Ben June 26, 2015 at 1:11 pm
I agree a phd often makes someone no more useful in society. However the behaviour of the kids is rational *because* employers demand a masters / phd.
Students are then caught in a trap. Employers demand the paper, often from an expensive institution. The credit is abundant thanks to govt backed loans. They are caught in a situation where as a collective it makes no sense to join in, but as an individual if they opt out they get hurt also.
Same deal for housing. It's a mad world my masters.
What can we do about this? The weak link in the chain seems to me to be employers. Why are they hurting themselves by selecting people who want higher pay but may offer little to no extra value? I work as a programmer and I often think " if we could just 'see' the non-graduate diamonds in the rough".
If employers had perfect knowledge of prospective employees *and* if they saw that a degree would make no difference to their performance universities would crumble overnight.
The state will never stop printing money via student loans. If we can fix recruitment then universities are dead.
washunate June 26, 2015 at 2:22 pm
Why are they hurting themselves by selecting people who want higher pay but may offer little to no extra value?
Yeah, I have thought a lot about that particular question of organizational behavior. It does make sense, conceptually, that somebody would disrupt the system and take people based on ability rather than credentials. Yet we are moving in the opposite direction, toward more rigidity in educational requirements for employment.
For my two cents, I think the bulk of the answer lies in how hiring specifically, and management philosophy more generally, works in practice. The people who make decisions are themselves also subject to someone else's decisions. This is true all up and down the hierarchical ladder, from board members and senior executives to the most junior managers and professionals.
It's true that someone without a degree may offer the same (or better) performance to the company. But they do not offer the same performance to the people making decisions, because those individual people also depend upon their own college degrees to sell their own labor services. To hire significant numbers of employees without degrees into important roles is to sabotage their own personal value.
Very few people are willing to be that kind of martyr. And generally speaking, they tend to self-select away from occupations where they can meaningfully influence decision-making processes in large organizations.
Absolutely, individual business owners can call BS on the whole scam. It is a way that individual people can take action against systemic oppression. Hire workers based upon their fit for the job, not their educational credentials or criminal background or skin color or sexual orientation or all of the other tests we have used. But that's not a systemic solution because the incentives created by public policy are overwhelming at large organizations to restrict who is 'qualified' to fill the good jobs (and increasingly, even the crappy jobs).
Laaughingsong June 26, 2015 at 3:03 pm
I am not so sure that this is so. So many jobs are now crapified. When I was made redundant in 2009, I could not find many jobs that fit my level of experience (just experience! I have no college degree), so I applied for anything that fit my skill set, pretty much regardless of level. I was called Overqualified. I have heard that in the past as well, but never more so during that stretch of job hunting. Remember that's with no degree. Maybe younger people don't hear it as much. But I also think life experience has something to do with it, you need to have something to compare it to. How many times did our parents tell us how different things were when they were kids, how much easier? I didn't take that on board, did y'all?
sam s smith June 26, 2015 at 4:03 pm
I blame HR.
tsk June 27, 2015 at 4:42 pm
For various reasons, people seeking work these days, especially younger job applicants, might not possess the habits of mind and behavior that would make them good employees – i.e., punctuality, the willingness to come to work every day (even when something more fun or interesting comes up, or when one has partied hard the night before), the ability to meet deadlines rather than make excuses for not meeting them, the ability to write competently at a basic level, the ability to read instructions, diagrams, charts, or any other sort of necessary background material, the ability to handle basic computation, the ability to FOLLOW instructions rather than deciding that one will pick and choose which rules and instructions to follow and which to ignore, trainability, etc.
Even if a job applicant's degree is in a totally unrelated field, the fact that he or she has managed to complete an undergraduate degree–or, if relevant, a master's or a doctorate – is often accepted by employers as a sign that the applicant has a sense of personal responsibility, a certain amount of diligence and educability, and a certain level of basic competence in reading, writing, and math.
By the same token, employers often assume that an applicant who didn't bother going to college or who couldn't complete a college degree program is probably not someone to be counted on to be a responsible, trainable, competent employee.
Obviously those who don't go to college, or who go but drop out or flunk out, end up disadvantaged when competing for jobs, which might not be fair at all in individual cases, especially now that college has been priced so far out of the range of so many bright, diligent students from among the poor and and working classes, and now even those from the middle class.
Nevertheless, in general an individual's ability to complete a college degree is not an unreasonable stand-in as evidence of that person's suitability for employment.
Roland June 27, 2015 at 5:14 pm
Nicely put, Ben.
Students are first caught in a trap of "credentials inflation" needed to obtain jobs, then caught by inflation in education costs, then stuck with undischargeable debt. And the more of them who get the credentials, the worse the credentials inflation–a spiral.
It's all fuelled by loose credit. The only beneficiaries are a managerial elite who enjoy palatial facilities.
As for the employers, they're not so bad off. Wages are coming down for credentialled employees due to all the competition. There is such a huge stock of degreed applicants that they can afford to ignore anyone who isn't. The credentials don't cost the employer–they're not spending the money, nor are they lending the money.
Modern money makes it possible for the central authorities to keep this racket going all the way up to the point of general systemic collapse. Why should they stop? Who's going to make them stop?
Bobbo June 26, 2015 at 10:19 am
The only reason the universities can get away with it is easy money. When the time comes that students actually need to pay tuition with real money, money they or their parents have actually saved, then college tuition rates will crash back down to earth. Don't blame the universities. This is the natural and inevitable outcome of easy money.
Jim June 26, 2015 at 10:54 am
Yes, college education in the US is a classic example of the effects of subsidies. Eliminate the subsidies and the whole education bubble would rapidly implode.
washunate June 26, 2015 at 11:03 am
I'm very curious if anyone will disagree with that assessment.
An obvious commonality across higher education, healthcare, housing, criminal justice, and national security is that we spend huge quantities of public money yet hold the workers receiving that money to extremely low standards of accountability for what they do with it.
tegnost June 26, 2015 at 11:38 am
Correct, it's not the universities, it's the culture that contains the universities, but the universities are training grounds for the culture so it is the universities just not only the universities Been remembering the song from my college days "my futures so bright i gotta wear shades". getting rich was the end in itself, and people who didn't make it didn't deserve anything but a whole lot of student debt,creating perverse incentives. And now we all know what the A in type a stands for at least among those who self identify as such, so yes it is the universities
Chris in Paris June 26, 2015 at 12:07 pm
I don't understand why the ability to accept guaranteed loan money doesn't come with an obligation by the school to cap tuition at a certain percentage over maximum loan amount? Would that be so hard to institute?
Ben June 26, 2015 at 1:53 pm
Student loans are debt issuance. Western states are desperate to issue debt as it's fungible with money and marked down as growth.
Borrow 120K over 3 years and it all gets paid into university coffers and reappears as "profit" now. Let some other president deal with low disposable income due to loan repayments. It's in a different electoral cycle – perfect.
jrd2 June 26, 2015 at 11:50 am
You can try to argue, but it will be hard to refute. If you give mortgages at teaser rates to anybody who can fog a mirror, you get a housing bubble. If you give student loans to any student without regard to the prospects of that student paying back the loan, you get a higher education bubble. Which will include private equity trying to catch as much of this money as they possibly can by investing in for profit educational institutions just barely adequate to benefit from federal student loan funds.
jrs June 26, 2015 at 6:16 pm
A lot of background conditions help. It helps to pump a housing bubble if there's nothing else worth investing in (including saving money at zero interest rates). It helps pump an education bubble if most of the jobs have been outsourced so people are competing more and more for fewer and fewer.
Beans June 26, 2015 at 11:51 am
I don't disagree with the statement that easy money has played the biggest role in jacking up tuition. I do strongly disagree that we shouldn't "blame" the universities. The universities are exactly where we should place the blame. The universities have become job training grounds, and yet continue to droll on and on about the importance of noble things like liberal education, the pursuit of knowledge, the importance of ideas, etc. They cannot have it both ways. Years ago, when tuition rates started escalating faster than inflation, the universities should have been the loudest critics – pointing out the cultural problems that would accompany sending the next generation into the future deeply indebted – namely that all the noble ideas learned at the university would get thrown out the window when financial reality forced recent graduates to chose between noble ideas and survival. If universities truly believed that a liberal education was important; that the pursuit of knowledge benefitted humanity – they should have led the charge to hold down tuition.
washunate June 26, 2015 at 12:47 pm
I took it to mean blame as in what allows the system to function. I heartily agree that highly paid workers at universities bear blame for what they do (and don't do) at a granular level.
It's just that they couldn't do those things without the system handing them gobs of resources, from tax deductability of charitable contributions to ignoring anti-competitive behavior in local real estate ownership to research grants and other direct funding to student loans and other indirect funding.
Jim June 26, 2015 at 3:09 pm
Regarding blaming "highly paid workers at universities" – If a society creates incentives for dysfunctional behavior such a society will have a lot of dysfunction. Eliminate the subsidies and see how quicly the educational bubble pops.
James Levy June 26, 2015 at 2:45 pm
You are ignoring the way that the rich bid up the cost of everything. 2% of the population will pay whatever the top dozen or so schools will charge so that little Billy or Sue can go to Harvard or Stanford. This leads to cost creep as the next tier ratchet up their prices in lock step with those above them, etc. The same dynamic happens with housing, at least around wealthy metropolitan areas.
daniel June 26, 2015 at 12:07 pm
Hi to you two,
A European perspective on this: yep, that's true on an international perspective. I belong to the ugly list of those readers of this blog who do not fully share the liberal values of most of you hear. However, may I say that I can agree on a lot of stuff.
US education and health-care are outrageously costly. Every European citizen moving to the states has a question: will he or she be sick whilst there. Every European parent with kids in higher education is aware that having their kids for one closing year in the US is the more they can afford (except if are a banquier d'affaires ). Is the value of the US education good? No doubt! Is is good value for money, of course not. Is the return on the money ok? It will prove disastrous, except if the USD crashed. The main reason? Easy money. As for any kind of investment. Remember that this is indeed a investment plan
Check the level of revenues of "public sector" teaching staff on both sides of the ponds. The figure for US professionals in these area are available on the Web. They are indeed much more costly than, say, North-of-Europe counterparts, "public sector" professionals in those area. Is higher education in the Netherlands sub-par when compared to the US? Of course not.
Yep financing education via the Fed (directly or not) is not only insanely costly. Just insane. The only decent solution: set up public institutions staffed with service-minded professionals that did not have to pay an insane sum to build up the curriculum themselves.
Are "public services" less efficient than private ones here in those area, health-care and higher education. Yep, most certainly. But, sure, having the fed indirectly finance the educational system just destroy any competitive savings made in building a competitive market-orientated educational system and is one of the worst way to handle your educational system.
Yep, you can do a worst use of the money, subprime or China buildings But that's all about it.
US should forget about exceptionnalism and pay attention to what North of Europe is doing in this area. Mind you, I am Southerner (of Europe). But of course I understand that trying to run these services on a federal basis is indeed "mission impossible".
Way to big! Hence the indirect Washington-decided Wall-Street-intermediated Fed-and-deficit-driven financing of higher education. Mind you: we have more and more of this bankers meddling in education in Europe and I do not like what I see.
John Zelnicker June 27, 2015 at 1:36 pm
@washunate – 6/26/15, 11:03 am. I know I'm late to the party, but I disagree. It's not the workers, it's the executives and management generally. Just like Wall Street, many of these top administrators have perfected the art of failing upwards.
IMNSHO everyone needs to stop blaming labor and/or the labor unions. It's not the front line workers, teachers, retail clerks, adjunct instructors, all those people who do the actual work rather than managing other people. Those workers have no bargaining power, and the unions have lost most of theirs, in part due to the horrible labor market, as well as other important reasons.
We have demonized virtually all of the government workers who actually do the work that enables us to even have a government (all levels) and to provide the services we demand, such as public safety, education, and infrastructure. These people are our neighbors, relatives and friends; we owe them better than this.
/end of rant
Roland June 27, 2015 at 5:20 pm
Unionized support staff at Canadian universities have had sub-inflation wage increases for nearly 20 years, while tuition has been rising at triple the rate of inflation.
So obviously one can't blame the unions for rising education costs.
Spring Texan June 28, 2015 at 8:03 am
Thanks for your rant! You said a mouthful. And could not be more correct.
Adam Eran June 26, 2015 at 12:18 pm
Omitted from this account: Federal funding for education has declined 55% since 1972. Part of the Powell memo's agenda.
It's understandable too; one can hardly blame legislators for punishing the educational establishment given the protests of the '60s and early '70s After all, they were one reason Nixon and Reagan rose to power. How dare they propose real democracy! Harumph!
To add to students' burden, there's the recent revision of bankruptcy law: student loans can no longer be retired by bankruptcy (Thanks Hillary!) It'll be interesting to see whether Hillary's vote on that bankruptcy revision becomes a campaign issue.
I also wonder whether employers will start to look for people without degrees as an indication they were intelligent enough to sidestep this extractive scam.
washunate June 26, 2015 at 1:54 pm
I'd be curious what you count as federal funding. Pell grants, for example, have expanded both in terms of the number of recipients and the amount of spending over the past 3 – 4 decades.
More generally, federal support for higher ed comes in a variety of forms. The bankruptcy law you mention is itself a form of federal funding. Tax exemption is another. Tax deductabiliity of contributions is another. So are research grants and exemptions from anti-competitive laws and so forth. There are a range of individual tax credits and deductions. The federal government also does not intervene in a lot of state supports, such as licensing practices in law and medicine that make higher ed gatekeepers to various fiefdoms and allowing universities to take fees for administering (sponsoring) charter schools. The Federal Work-Study program is probably one of the clearest specific examples of a program that offers both largely meaningless busy work and terrible wages.
As far as large employers seeking intelligence, I'm not sure that's an issue in the US? Generally speaking, the point of putting a college credential in a job requirement is precisely to find people participating in the 'scam'. If an employer is genuinely looking for intelligence, they don't have minimum educational requirements.
Laughingsong June 26, 2015 at 3:12 pm
I heard that Congress is cutting those:
different clue June 28, 2015 at 3:06 am
Why would tuition rates come down when students need to pay with "real money, money they or their parents have actually saved. . . " ? Didn't tuition at state universities begin climbing when state governments began boycotting state universities in terms of embargoing former rates of taxpayer support to them? Leaving the state universities to try making up the difference by raising tuition? If people want to limit or reduce the tuition charged to in-state students of state universities, people will have to resume paying former rates of taxes and elect people to state government to re-target those taxes back to state universities the way they used to do before the reductions in state support to state universities.
Jesper June 26, 2015 at 10:29 am
Protest against exploitation and risk being black-listed by exploitative employers -> Only employers left are the ones who actually do want (not pretend to want) ethical people willing to stand up for what they believe in. Not many of those kind of employers around . What is the benefit? What are the risks?
Tammy June 27, 2015 at 4:35 pm
What is the benefit? What are the risks?
I am not a progressive, yet, there is always risk for solidary progress.
Andrew June 26, 2015 at 10:53 am
The author misrepresents the nature and demands of Chile's student movement.
Over the past few decades, university enrollment rates for Chileans expanded dramatically in part due to the creation of many private universities. In Chile, public universities lead the pack in terms of academic reputation and entrance is determined via competitive exams. As a result, students from poorer households who attended low-quality secondary schools generally need to look at private universities to get a degree. And these are the students to which the newly created colleges catered to.
According to Chilean legislation, universities can only function as non-profit entities. However, many of these new institutions were only nominally non-profit entities (for example, the owners of the university would also set up a real estate company that would rent the facilities to the college at above market prices) and they were very much lacking in quality. After a series of high-profile cases of universities that were open and shut within a few years leaving its students in limbo and debt, anger mounted over for-profit education.
The widespread support of the student movement was due to generalized anger about and education system that is dearly lacking in quality and to the violation of the spirit of the law regulating education. Once the student movement's demands became more specific and morphed from opposing for profit institutions to demanding free tuition for everyone, the widespread support waned quickly.
And while the government announced free tuition in public universities, there is a widespread consensus that this is a pretty terrible idea as it is regressive and involves large fiscal costs. In particular because most of the students that attend public universities come from relatively wealthy households that can afford tuition. The students that need the tuition assistance will not benefit under the new rules.
I personally benefited from the fantastically generous financial aid systems that some private American universities have set up which award grants and scholarships based on financial need only. And I believe that it is desirable for the State to guarantee that any qualified student has access to college regardless of his or her wealth I think that by romanticizing the Chilean student movement the author reveals himself to be either is dishonest or, at best, ignorant.
RanDomino June 27, 2015 at 12:23 pm
The protests also involved extremely large riots.
The Insider June 26, 2015 at 10:57 am
Students aren't protesting because they don't feel the consequences until they graduate.
One thing that struck me when I applied for a student loan a few years back to help me get through my last year of graduate school – the living expense allocation was surprisingly high. Not "student sharing an apartment with five random dudes while eating ramen and riding the bus", but more "living alone in a nice one-bedroom apartment while eating takeout and driving a car". Apocryphal stories of students using their student loans to buy new cars or take extravagant vacations were not impossible to believe.
The living expense portion of student loans is often so generous that students can live relatively well while going to school, which makes it that much easier for them to push to the backs of their minds the consequences that will come from so much debt when they graduate. Consequently, it isn't the students who are complaining – it's the former students. But by the time they are out of school and the university has their money in its pocket, it's too late for them to try and change the system.
lord koos June 26, 2015 at 11:42 am
I'm sure many students are simply happy to be in college the ugly truth hits later.
optimader June 26, 2015 at 12:39 pm
Sophomore Noell Conley lives there, too. She shows off the hotel-like room she shares with a roommate.
"As you walk in, to the right you see our granite countertops with two sinks, one for each of the residents," she says.
A partial wall separates the beds. Rather than trek down the hall to shower, they share a bathroom with the room next door.
"That's really nice compared to community bathrooms that I lived in last year," Conley says.
To be fair, granite countertops last longer. Tempur-Pedic is a local company - and gave a big discount. The amenities include classrooms and study space that are part of the dorm. Many of the residents are in the university's Honors program. But do student really need Apple TV in the lounges, or a smartphone app that lets them check their laundry status from afar?
"Demand has been very high," says the university's Penny Cox, who is overseeing the construction of several new residence halls on campus. Before Central Hall's debut in August, the average dorm was almost half a century old, she says. That made it harder to recruit.
"If you visit places like Ohio State, Michigan, Alabama," Cox says, "and you compare what we had with what they have available to offer, we were very far behind."
Today colleges are competing for a more discerning consumer. Students grew up with fewer siblings, in larger homes, Cox says. They expect more privacy than previous generations - and more comforts.
"These days we seem to be bringing kids up to expect a lot of material plenty," says Jean Twenge, a psychology professor at San Diego State University and author of the book "Generation Me."
Those students could be in for some disappointment when they graduate, she says.
"When some of these students have all these luxuries and then they get an entry-level job and they can't afford the enormous flat screen and the granite countertops," Twenge says, "then that's going to be a rude awakening."
Some on campus also worry about the divide between students who can afford such luxuries and those who can't. The so-called premium dorms cost about $1,000 more per semester. Freshman Josh Johnson, who grew up in a low-income family and lives in one of the university's 1960s-era buildings, says the traditional dorm is good enough for him.
"I wouldn't pay more just to live in a luxury dorm," he says. "It seems like I could just pay the flat rate and get the dorm I'm in. It's perfectly fine."
In the near future students who want to live on campus won't have a choice. Eventually the university plans to upgrade all of its residence halls.
So I wonder who on average will fair better navigating the post-college lifestyle/job market reality check, Noell or Josh? Personally, I would bet on the Joshes living in the 60's vintage enamel painted ciderblock dorm rooms.
optimader June 26, 2015 at 12:47 pm
Universities responding to the market
Competition for students who have more sophisticated tastes than in past years is creating the perfect environment for schools to try to outdo each other with ever-more posh on-campus housing. Keeping up in the luxury dorm race is increasingly critical to a school's bottom line: A 2006 study published by the Association of Higher Education Facilities Officers found that "poorly maintained or inadequate residential facilities" was the number-one reason students rejected enrolling at institutions.
PHOTO GALLERY: Click Here to See the 10 Schools with Luxury Dorms
Private universities get most of the mentions on lists of schools with great dorms, as recent ratings by the Princeton Review, College Prowler, and Campus Splash make clear. But a few state schools that have invested in brand-new facilities are starting to show up on those reviews, too.
While many schools offer first dibs on the nicest digs to upperclassmen on campus, as the war for student dollars ratchets up even first-year students at public colleges are living in style. Here are 10 on-campus dormitories at state schools that offer students resort-like amenities.
Jerry Denim June 26, 2015 at 4:37 pm
Bingo! They don't get really mad until they're in their early thirties and they are still stuck doing some menial job with no vacation time, no health insurance and a monstrous mountain of debt. Up until that point they're still working hard waiting for their ship to come in and blaming themselves for any lack of success like Steinbeck's 'embarrassed millionaires.' Then one day maybe a decade after they graduate they realize they've been conned but they've got bills to pay and other problems to worry about so they solider on. 18 year-olds are told by their high school guidance councilors, their parents and all of the adults they trust that college while expensive is a good investment and the only way to succeed. Why should they argue? They don't know any better yet.
different clue June 28, 2015 at 3:09 am
Perhaps some students are afraid to protest for fear of being photographed or videographed and having their face and identity given to every prospective employer throughout America. Perhaps those students are afraid of being blackballed throughout the Great American Workplace if they are caught protesting anything on camera.
Today isn't like the sixties when you could drop out in the confidence that you could always drop back in again. Nowadays there are ten limpets for every scar on the rock.
seabos84 June 26, 2015 at 11:16 am
the average is such a worthless number. The Data we need, and which all these parasitic professional managerial types won't provide –
x axis would be family income, by $5000 increments.
y axis would be the median debt level
we could get fancy, and also throw in how many kids are in school in each of those income increments.
BTW – this 55 yr. old troglodyte believes that 1 of the roles (note – I did NOT say "The Role") of education is preparing people to useful to society. 300++ million Americans, 7 billion humans – we ALL need shelter, reliable and safe food, reliable and safe water, sewage disposal, clothing, transportation, education, sick care, power, leisure, we should ALL have access to family wage jobs and time for BBQs with our various communities several times a year. I know plenty of techno-dweebs here in Seattle who need to learn some of the lessons of 1984, The Prince, and Shakespeare. I know plenty of fuzzies who could be a bit more useful with some rudimentary skills in engineering, or accounting, or finance, or stats, or bio, or chem
I don't know what the current education system is providing, other than some accidental good things for society at large, and mainly mechanisms for the para$ite cla$$e$ to stay parasites.
Adam Eran June 26, 2015 at 12:22 pm
Mao was perfectly content to promote technical education in the new China. What he deprecated (and fought to suppress) was the typical liberal arts notion of critical thinking. We're witnessing something comparable in the U.S.
This suppression in China led to an increase in Mao's authority (obviously), but kept him delusional. For example, because China relied on Mao's agricultural advice, an estimated 70 million Chinese died during peacetime. But who else was to be relied upon as an authority?
Back the the U.S.S.A. (the United StateS of America): One Australian says of the American system: "You Yanks don't consult the wisdom of democracy; you enable mobs."
Tammy June 27, 2015 at 4:41 pm
Mao was perfectly content to promote technical education in the new China. What he deprecated (and fought to suppress) was the typical liberal arts notion of critical thinking. We're witnessing something comparable in the U.S. We're witnessing something comparable in the U.S.
Mao liked chaos because he believed in continuous revolution. I would argue what we're experiencing is nothing comparable to what China experienced. (I hope I've understood you correctly.)
Ted June 26, 2015 at 11:20 am
I am pretty sure a tradition of protest to affect political change in the US is a rather rare bird. Most people "protest" by changing their behavior. As an example, by questioning the value of the 46,000 local private college tuition as opposed the the 15k and 9k tiered state college options. My daughter is entering the freshman class next year, we opted for the cheaper state option because, in the end, a private school degree adds nothing, unless it is to a high name recognition institution.
I think, like housing, a downstream consequence of "the gouge" is not to question - much less understand - class relations, but to assess the value of the lifetyle choice once you are stuck with the price of paying for that lifestyle in the form of inflated debt repayments. Eventually "the folk" figure it out and encourage cheaper alternatives toward the same goal.
Jim June 26, 2015 at 3:18 pm
There's probably little point in engaging in political protest. Most people maximise their chances of success by focusing on variables over which they have some degree of control. The ability of most people to have much effect on the overall political-economic system is slight and any returns from political activity are highly uncertain.
jrs June 26, 2015 at 9:53 pm
How does anyone even expect to maintain cheap available state options without political activity? By wishful thinking I suppose?
The value of a private school might be graduating sooner, state schools are pretty overcrowded, but that may not at all be worth the debt (I doubt it almost ever is on a purely economic basis).
RabidGandhi June 27, 2015 at 7:57 pm
Maybe if we just elect the right people with cool posters and a hopey changey slogan, they'll take care of everything for us and we won't have to be politically active.
jrs June 26, 2015 at 10:04 pm
Of course refusal to engage politically because the returns to oneself by doing so are small really IS the tragedy of the commons. Thus one might say it's ethical to engage politically in order to avoid it. Some ethical action focuses on overcoming tragedy of the commons dilemmas. Of course the U.S. system being what it is I have a hard time blaming anyone for giving up.
chairman June 26, 2015 at 11:37 am
The middle class, working class and poor have no voice in politics or policy at all, and they don't know what's going on until it's too late. They've been pushed by all their high school staff that college is the only acceptable option - and often it is. What else are they going to do out of high school, work a 30 hour a week minimum wage retail job? The upper middle class and rich, who entirely monopolize the media, don't have any reason to care about skyrocketing college tuition - their parents are paying for it anyway. They'd rather write about the hip and trendy issues of the day, like trigger warnings.
Fool June 26, 2015 at 1:17 pm
To the contrary, they're hardly advised by "their high school staff"; nonetheless, subway ads for Phoenix, Monroe, etc. have a significant influence.
Uncle Bruno June 26, 2015 at 11:58 am
They're too busy working
Fool June 26, 2015 at 1:20 pm
collegestudent June 26, 2015 at 12:39 pm
Speaking as one of these college students, I think that a large part of the reason that the vast majority of students are just accepting the tuition rates is because it has become the societal norm. Growing up I can remember people saying "You need to go to college to find a good job." Because a higher education is seen as a necessity for most people, students think of tuition as just another form of taxes, acceptable and inevitable, which we will expect to get a refund on later in life.
Pitchfork June 26, 2015 at 1:03 pm
I teach at a "good" private university. Most of my students don't have a clue as to how they're being exploited. Many of the best students feel enormous pressure to succeed and have some inkling that their job prospects are growing narrower, but they almost universally accept this as the natural order of things. Their outlook: if there are 10 or 100 applicants for every available job, well, by golly, I just have to work that much harder and be the exceptional one who gets the job.
Incoming freshmen were born in the late 90s - they've never known anything but widespread corruption, financial and corporate oligarchy, i-Pads and the Long Recession.
But as other posters note, the moment of realization usually comes after four years of prolonged adolescence, luxury dorm living and excessive debt accumulation.
Tammy June 27, 2015 at 4:49 pm
Most Ph.D.'s don't either. I'd argue there have been times they have attempted to debate that exploitation is a good–for their employer and himself/herself–with linguistic games. Mind numbing . To be fair, they have a job.
Gottschee June 26, 2015 at 1:34 pm
I have watched the tuition double–double!–at my alma mater in the last eleven years. During this period, administrators have set a goal of increasing enrollment by a third, and from what I hear, they've done so. My question is always this: where is the additional tuition money going? Because as I walk through the campus, I don't really see that many improvements–yes, a new building, but that was supposedly paid for by donations and endowments. I don't see new offices for these high-priced admin people that colleges are hiring, and in fact, what I do see is an increase in the number of part-time faculty and adjuncts. The tenured faculty is not prospering from all this increased revenue, either.
I suspect the tuition is increasing so rapidly simply because the college can get away with it. And that means they are exploiting the students.
While still a student, I once calculated that it cost me $27.00/hour to be in class. (15 weeks x 20 "contact hours" per week =
300 hours/semester, $8000/semester divided by 300 hours = $27.00/hour). A crude calculation, certainly, but a starting point. I did this because I had an instructor who was consistently late to class, and often cancelled class, so much that he wiped out at least $300.00 worth of instruction. I had the gall to ask for a refund of that amount. I'm full of gall. Of course, I was laughed at, not just by the administrators, but also by some students.
Just like medical care, education pricing is "soft," that is, the price is what you are willing to pay. Desirable students get scholarships and stipends, which other students subsidize; similarly, some pre-ACA patients in hospitals were often treated gratis.
Students AND hospital patients alike seem powerless to affect the contract with the provider. Reform will not likely be forthcoming, as students, like patients, are "just passing through."
Martin Finnucane June 26, 2015 at 2:10 pm
Higher education wears the cloak of liberalism, but in policy and practice, it can be a corrupt and cutthroat system of power and exploitation.
I find the "but" in that sentence to be dissonant.
Mark Anderson June 26, 2015 at 3:12 pm
The tuition at most public universities has quadrupled or more over the last 15 to 20 years precisely BECAUSE state government subsidies have been
slashed in the meantime. I was told around 2005 that quadrupled tuition at the University of Minnesota made up for about half of the state money that the legislature had slashed from the university budget over the previous 15 years.
It is on top of that situation that university administrators are building themselves little aristocratic empires, very much modeled on the kingdoms of corporate CEOs
where reducing expenses (cutting faculty) and services to customers (fewer classes, more adjuncts) is seen as the height of responsibility and accountability, perhaps
even the definition of propriety.
Jim June 26, 2015 at 3:23 pm
Everyone should read the introductory chapter to David Graeber's " The Utopia of Rules: On Technology, Stupidity and the Secret Joys of Bureaucracy."
In Chapter One of this book entitled "The Iron law of Liberalism and the Era of Total Bureaucratization" Graeber notes that the US has become the most rigidly credentialised society in the world where
" in field after field from nurses to art teachers, physical therapists, to foreign policy consultants, careers which used to be considered an art (best learned through doing) now require formal professional training and a certificate of completion."
Graeber, in that same chapter, makes another extremely important point. when he notes that career advancement in may large bureaucratic organizations demands a willingness to play along with the fiction that advancement is based on merit, even though most everyone know that this isn't true.
The structure of modern power in the U.S., in both the merging public and private sectors, is built around the false ideology of a giant credentialized meritorcracy rather than the reality of arbitrary extraction by predatory bureaucratic networks.
armchair June 26, 2015 at 3:27 pm
Anecdote: I was speaking to someone who recently started working at as a law school administrator at my alma mater. Enrollment is actually down at law schools (I believe), because word has spread about the lame legal job market. So, the school administration is watching its pennies, and the new administrator says the administrators aren't getting to go on so many of the all expense paid conferences and junkets that they used to back in the heyday. As I hear this, I am thinking about how many of these awesome conferences in San Diego, New Orleans and New York that I'm paying back. Whatever happened to the metaphorical phrase: "when a pig becomes a hog, it goes to slaughter"?
Another anecdote: I see my undergrad alma mater has demolished the Cold War era dorms on one part of campus and replaced it with tons of slick new student housing.
MaroonBulldog June 26, 2015 at 7:15 pm
No doubt those Cold War era dorms had outlived their planned life. Time for replacement. Hell, they had probably become inhabitable and unsafe.
Meanwhile, has your undergraduate school replaced any of its lecture courses with courses presented same model as on-line traffic school? I have a pending comment below about how my nephew's public university "taught" him introductory courses in accounting and macroeconomics that way. Please be assured that the content of those courses was on a par with best practices in the on-line traffic school industry. It would be hilarious if it weren't so desperately sad.
Roquentin June 26, 2015 at 5:04 pm
I read things like this and think about Louis Althusser and his ideas about "Ideological State Apparatuses." While in liberal ideology the education is usually considered to be the space where opportunity to improve one's situation is founded, Althusser reached the complete opposite conclusion. For him, universities are the definitive bourgeois institution, the ideological state apparatus of the modern capitalist state par excellance. The real purpose of the university was not to level the playing field of opportunity but to preserve the advantages of the bourgeoisie and their children, allowing the class system to perpetuate/reproduce itself.
It certainly would explain a lot. It would explain why trying to send everyone to college won't solve this, because not everyone can have a bourgeois job. Some people actually have to do the work. The whole point of the university as an institution was to act as a sorting/distribution hub for human beings, placing them at certain points within the division of labor. A college degree used to mean more because getting it was like a golden ticket, guaranteeing someone who got it at least a petit-bourgeois lifestyle. The thing is, there are only so many slots in corporate America for this kind of employment. That number is getting smaller too. You could hand every man, woman, and child in America a BS and it wouldn't change this in the slightest.
What has happened instead, for college to preserve its role as the sorting mechanism/preservation of class advantage is what I like to call degree inflation and/or an elite formed within degrees themselves. Now a BS or BA isn't enough, one needs an Master's or PhD to really be distinguished. Now a degree from just any institution won't do, it has to be an Ivy or a Tier 1 school. Until we learn to think realistically about what higher education is as an institution little or nothing will change.
Jim June 26, 2015 at 8:14 pm
Any credential is worthless if everybody has it. All information depends on contrast. It's impossible for everybody to "stand out" from the masses. The more people have college degrees the less value a college degree has.
sid_finster June 26, 2015 at 5:49 pm
When I was half-grown, I heard it said that religion is no longer the opiate of the masses, in that no one believes in God anymore, at least not enough for it to change actual behavior.
Instead, buying on credit is the opiate of the masses.
MaroonBulldog June 26, 2015 at 6:58 pm
My nephew asked me to help him with his college introductory courses in macroeconomics and accounting. I was disappointed to find out what was going on: no lectures by professors, no discussion sessions with teaching assistants; no team projects–just two automated correspondence courses, with automated computer graded problem sets objective tests – either multiple choice, fill in the blank with a number, or fill in the blank with a form answer. This from a public university that is charging tuition for attendance just as though it were really teaching something. All they're really certifying is that the student can perform exercises is correctly reporting what a couple of textbooks said about subjects of marginal relevance to his degree. My nephew understands exactly that this is going on, but still .
This is how 21st century America treats its young people: it takes people who are poor, in the sense that they have no assets, and makes them poorer, loading them up with student debt, which they incur in order to finance a falsely-so-called course of university study that can't be a good deal, even for the best students among them.
I am not suggesting the correspondence courses have no worth at all. But they do not have the worth that is being charged for them in this bait-and-switch exercise by Ed Business.
MaroonBulldog June 27, 2015 at 1:39 am
After further thought, I'd compare my nephew's two courses to on-line traffic school: Mechanized "learning" – forget it all as soon as the test is over – Critical thinking not required. Except for the kind of "test preparation" critical thinking that teaches one to spot and eliminate the obviously wrong choices in objective answers–that kind of thinking saves time and so is very helpful.
Not only is he paying full tuition to receive this treatment, but his family and mine are paying taxes to support it, too.
Very useful preparation for later life, where we can all expect to attend traffic school a few times. But no preparation for any activity of conceivable use or benefit to any other person.
Spring Texan June 28, 2015 at 8:07 am
Good story. What a horrible rip-off!
P. Fitzsimon June 27, 2015 at 12:26 pm
I read recently that the business establishment viewed the most important contribution of colleges was that they warehoused young people for four years to allow maturing.
Fred Grosso June 27, 2015 at 4:55 pm
Where are the young people in all this? Is anyone going to start organizing to change things? Any ideas? Any interest? Are we going to have some frustrated, emotional person attempt to kill a university president once every ten years? Then education can appeal for support from the government to beef up security. Meanwhile the same old practices will prevail and the rich get richer and the rest of us get screwed.
Come on people step up.
Unorthodoxmarxist June 27, 2015 at 6:22 pm
The reason students accept this has to be the absolutely demobilized political culture of the United States combined with what college represents structurally to students from the middle classes: the only possibility – however remote – of achieving any kind of middle class income.
Really your choices in the United States are, in terms of jobs, to go into the military (and this is really for working class kids, Southern families with a military history and college-educated officer-class material) or to go to college.
The rest, who have no interest in the military, attend college, much like those who wanted to achieve despite of their class background went into the priesthood in the medieval period. There hasn't been a revolt due to the lack of any idea it could function differently and that American families are still somehow willing to pay the exorbitant rates to give their children a piece of paper that still enables them to claim middle class status though fewer and fewer find jobs. $100k in debt seems preferable to no job prospects at all.
Colleges have become a way for the ruling class to launder money into supposed non-profits and use endowments to purchase stocks, bonds, and real estate. College administrators and their lackeys (the extended school bureaucracy) are propping up another part of the financial sector – just take a look at Harvard's $30+ billion endowment, or Yale's $17 billion – these are just the top of a very large heap. They're all deep into the financial sector. Professors and students are simply there as an excuse for the alumni money machine and real estate scams to keep running, but there's less and less of a reason for them to employ professors, and I say this as a PhD with ten years of teaching experience who has seen the market dry up even more than it was when I entered grad school in the early 2000s.
A Real Black Person purple monkey dishwasher June 28, 2015 at 9:13 pm
"Colleges have become a way for the ruling class to launder money into supposed non-profits and use endowments to purchase stocks, bonds, and real estate. "
Unorthodoxmarxist, I thought I was the only person who was coming to that conclusion. I think there's data out there that could support our thesis that college tuition inflation may be affecting real estate prices. After all, justification a college grad gave to someone who was questioning the value of a college degree was that by obtaining a "a degree" and a professional job, an adult could afford to buy a home in major metropolitan hubs. I'm not sure if he was that ignorant, (business majors, despite the math requirement are highly ideological people. They're no where near as objective as they like to portray themselves as) or if he hasn't been in contact with anyone with a degree trying to buy a home in a metropolitan area.
Anyways, if our thesis is true, then if home prices declined in 2009, then college tuition should have declined as well, but it didn't at most trustworthy schools. Prospective students kept lining up to pay more for education that many insiders believe is "getting worse" because of widespread propaganda and a lack of alternatives, especially for "middle class" women.
Pelham June 27, 2015 at 7:04 pm
It's hard to say, but there ought to be a power keg of students here primed to blow. And Bernie Sanders' proposal for free college could be the fuse.
But first he'd have the light the fuse, and maybe he can. He's getting huge audiences and a lot of interest these days. And here's a timely issue. What would happen if Sanders toured colleges and called for an angry, mass and extended student strike across the country to launch on a certain date this fall or next spring to protest these obscene tuitions and maybe call for something else concrete, like a maximum ratio of administrators to faculty for colleges to receive accreditation?
It could ignite not only a long-overdue movement on campuses but also give a big boost to his campaign. He'd have millions of motivated and even furious students on his side as well as a lot of motivated and furious parents of students (my wife and I would be among them) - and these are just the types of people likely to get out and vote in the primaries and general election.
Sanders' consistent message about the middle class is a strong one. But here's a solid, specific but very wide-ranging issue that could bring that message into very sharp relief and really get a broad class of politically engaged people fired up.
I'm not one of those who think Sanders can't win but applaud his candidacy because it will nudge Hillary Clinton. I don't give a fig about Clinton. I think there's a real chance Sanders can win not just the nomination but also the presidency. This country is primed for a sharp political turn. Sanders could well be the right man in the right place and time. And this glaring and ongoing tuition ripoff that EVERYONE agrees on could be the single issue that puts him front-and-center rather than on the sidelines.
Rosario June 28, 2015 at 1:18 am
I finished graduate school about three years ago. During the pre-graduate terms that I paid out of pocket (2005-2009) I saw a near 70 percent increase in tuition (look up KY college tuition 1987-2009 for proof).
Straight bullshit, but remember our school was just following the national (Neoliberal) model.
Though, realize that I was 19-23 years old. Very immature (still immature) and feeling forces beyond my control. I did not protest out of a) fear [?] (I don't know, maybe, just threw that in there) b) the sheepskin be the path to salvation (include social/cultural pressures from parent, etc.).
I was more affected by b). This is the incredible power of our current Capitalist culture. It trains us well. We are always speaking its language, as if a Classic. Appraising its world through its values.
I wished to protest (i.e. Occupy, etc.) but to which master? All of its targets are post modern, all of it, to me, nonsense, and, because of this undead (unable to be destroyed). This coming from a young man, as I said, still immature, though I fear this misdirection, and alienation is affecting us all.
John June 28, 2015 at 10:42 am
NYU can gouge away. It's filled with Chinese students (spies) who pay full tuition.
Nov 19, 2017 | www.theguardian.com
One of the biggest puzzles about our current predicament with fake news and the weaponisation of social media is why the folks who built this technology are so taken aback by what has happened. Exhibit A is the founder of Facebook, Mark Zuckerberg , whose political education I recently chronicled . But he's not alone. In fact I'd say he is quite representative of many of the biggest movers and shakers in the tech world. We have a burgeoning genre of " OMG, what have we done? " angst coming from former Facebook and Google employees who have begun to realize that the cool stuff they worked on might have had, well, antisocial consequences.
Put simply, what Google and Facebook have built is a pair of amazingly sophisticated, computer-driven engines for extracting users' personal information and data trails, refining them for sale to advertisers in high-speed data-trading auctions that are entirely unregulated and opaque to everyone except the companies themselves.
The purpose of this infrastructure was to enable companies to target people with carefully customised commercial messages and, as far as we know, they are pretty good at that. (Though some advertisers are beginning to wonder if these systems are quite as good as Google and Facebook claim.) And in doing this, Zuckerberg, Google co-founders Larry Page and Sergey Brin and co wrote themselves licenses to print money and build insanely profitable companies.
It never seems to have occurred to them that their engines could be used to deliver ideological and political messages
It never seems to have occurred to them that their advertising engines could also be used to deliver precisely targeted ideological and political messages to voters. Hence the obvious question: how could such smart people be so stupid? The cynical answer is they knew about the potential dark side all along and didn't care, because to acknowledge it might have undermined the aforementioned licenses to print money. Which is another way of saying that most tech leaders are sociopaths. Personally I think that's unlikely, although among their number are some very peculiar characters: one thinks, for example, of Paypal co-founder Peter Thiel – Trump's favourite techie; and Travis Kalanick, the founder of Uber.
So what else could explain the astonishing naivety of the tech crowd? My hunch is it has something to do with their educational backgrounds. Take the Google co-founders. Sergey Brin studied mathematics and computer science. His partner, Larry Page, studied engineering and computer science. Zuckerberg dropped out of Harvard, where he was studying psychology and computer science, but seems to have been more interested in the latter.
sWhy Facebook is in a hole over data mining | John Naughton
Now mathematics, engineering and computer science are wonderful disciplines – intellectually demanding and fulfilling. And they are economically vital for any advanced society. But mastering them teaches students very little about society or history – or indeed about human nature. As a consequence, the new masters of our universe are people who are essentially only half-educated. They have had no exposure to the humanities or the social sciences, the academic disciplines that aim to provide some understanding of how society works, of history and of the roles that beliefs, philosophies, laws, norms, religion and customs play in the evolution of human culture.
We are now beginning to see the consequences of the dominance of this half-educated elite. As one perceptive observer Bob O'Donnell puts it, "a liberal arts major familiar with works like Alexis de Tocqueville's Democracy in America , John Stuart Mill's On Liberty , or even the work of ancient Greek historians, might have been able to recognise much sooner the potential for the 'tyranny of the majority' or other disconcerting sociological phenomena that are embedded into the very nature of today's social media platforms. While seemingly democratic at a superficial level, a system in which the lack of structure means that all voices carry equal weight, and yet popularity, not experience or intelligence, actually drives influence, is clearly in need of more refinement and thought than it was first given."
All of which brings to mind CP Snow's famous Two Cultures lecture, delivered in Cambridge in 1959, in which he lamented the fact that the intellectual life of the whole of western society was scarred by the gap between the opposing cultures of science and engineering on the one hand, and the humanities on the other – with the latter holding the upper hand among contemporary ruling elites. Snow thought that this perverse dominance would deprive Britain of the intellectual capacity to thrive in the postwar world and he clearly longed to reverse it.
Snow passed away in 1980, but one wonders what he would have made of the new masters of our universe. One hopes that he might see it as a reminder of the old adage: be careful what you wish for – you might just get it.
John Dumaker , 20 Nov 2017 18:26Lack of education in the humanities is not the reason for misuse of the tech giant's products, as the author so emphatically states. It simply comes down to greed. That human drive to make more, more and more leads them to overlook things for the sake of making more. A class in political science or sociology is not going to change that.Laney65 -> Dan Campbell , 20 Nov 2017 17:55Middle and high school in the US need to tackle more philosophy, history and other humanities instead of force feeding kids test material for them to simply memorize. Then, lo and behold, by the time kids get into university, they may already have grasped the basics of human analytical skills. Why wait till further education?capatriot -> Zenovia Iordache , 20 Nov 2017 17:34Wtf? All this hue and cry that Facebook has "ruined" democracy ... and I see you've actually bought into it. Holy cow, who knew a few hundred thousand $$ gets Brexit and Trump done while $1 billion in actual adverts cannot elect Clinton?Rita Ihly -> Declawed , 20 Nov 2017 17:24
Goodness, that's some powerful analytica, no? You guys should really hear yourselves ... you sound utterly deranged by this Trump thing!If we are all concerned, we can remedy 'the problem'. Chuck Cable, ( I did 7 years ago), get off facebook, twitter and the like. We are all subject to the marketing, the allure of 'like' thinking, etc. Yet we need to 'grow up' mature, and be concerned about this path. Our youth is our hope, but if they are indoctrinated and sucked into the social network mess, I do not see a future or much hope. Yes, it is all about marketing, greed, and ego. Pretty difficult to overcome. Soul searching, integrity, and sincere concern for democracy is crucial.Hallucinogen , 20 Nov 2017 17:18Dizzy123 , 20 Nov 2017 17:17So stupid? Is the author claiming to have known this in advance of it happening?
It never seems to have occurred to them that their advertising engines could also be used to deliver precisely targeted ideological and political messages to voters. Hence the obvious question: how could such smart people be so stupid?A yes...science. "Once they go up, who cares where they come down, that's not my department, says Werner Von Braun" (Tom Leher) Man kind has always been willing to subjugate it's essential humanity for the elusive goal of "progress". The computer age is no different.Dizzy123 -> AsboSubject , 20 Nov 2017 17:14Well, actually , they did. Slaves were not allowed to vote in the UK either. And, one must remember, it was the UK that introduced slavery to North America which was, after all, a British colony ruled by British courts and British jurisprudence at that juncture.Dan Campbell -> funcrew , 20 Nov 2017 16:27Anyone who finishes engineering cannot be classified as a dim bulb. It's only understood by those that go through it how difficult it is in comparison to other things. The complexity is hard to explain to anyone outside of it. Most people fail out or quit, literally, and those are the ones that at least gave it a try. I watched many such people go on to the business or other schools and rush a frat and barely study and ace their courses. They said straight up that it wasn't even close.Dan Campbell , 20 Nov 2017 16:25Zuckerberg and similar folks are guilty of the same thing that most people are - greed. Monetary greed is just one part. Additionally, there's a ton of ego there to want to do things others haven't done or can't do or aren't doing, but ego is not exclusive to the tech industry. They were negligent in looking the other way while their products were exploited and they hid under freedom of speech, providing a functionality that isn't necessarily tied with or promotes nefarious conduct so they aren't responsible when it does. There's no shortage of this through years - radio, TV, nuclear power, guns, drug paraphernalia, chemicals, photo copiers, MP3 players and file copying services like Napster, on and on. It's not just technical items.ChinaDoubter , 20 Nov 2017 16:05
It's all about making money. Twitter is sitting back absolutely loving every Trump tweet, while individually at least some or many of the people there hate the actual tweets themselves or at least think the POTUS should be communicating in a better manner and put this ad hoc approach aside. I don't know of too many that think he's doing good things for the country or world or even his self image and reputation with it and should continue. But for Twitter it promotes their product and service and stock and pay check and bonus and livelihood. So the greed wins out.
As for education, it's not easy to get an engineering or comp sci degree. But while you are getting hammered in classes that are far more complex than most other things taught on the campus, you do indeed have to take a variety of other non-technical electives outside of your technical major to complete the overall curriculum. But there's only so much you can do, only so much time and interest. You can't necessarily expect each and everyone to be incredibly well rounded without at least sacrificing their ability to focus and specialize in their strength and interest. Pretty much every doctor I've met is aloof to some degree. Accountants have trouble thinking outside the strict confines of the accounting box. I know plenty of lawyers who aren't great with technology or computers. And few people in those professions that are also incredibly versed in the things the author mentions. Few have time to be once life and family kicks in.This likely has been pointed out already, but the American University system requires all students to take a core of humanities classes regardless of major. SO they actually have been exposed to, most likely, a fair number of Western Civ, History, and Literature courses. Their deficiency I think lays more in the utopian roots of the internet and technology development of the 1990s. They have been strangely naive and ruthless at the same time, and its changing human interactions and society sometimes for the better and sometimes for the worse.Dan Campbell -> LuvvleeJubblee , 20 Nov 2017 15:44He said he was "half educated" not because he finished only half of his comp sci degree (or even psychology) but because he wasn't educated in other subjects that may have given him insight into human behavior and sociology. There may be some truth to that but it seems kind of a stretch since pretty much most people are as he describes; he just seems to be picking on Zuckerberg since he developed something with such huge influence and is now on the hot seat for being at least naive if not deliberately looking the other way while his platform was used in ways he probably didn't envision or want but made them a ton of money. Most people aren't really that educated or versed in the things the author mentions, and that includes many people outside of the tech industry who could never accomplish what Zuckerberg or others have accomplished.funcrew , 20 Nov 2017 15:26A 4-year engineering degree already takes 5 years to complete (at least for a dim bulb like myself). We already have to take a bunch of non-technical social science, history, and English "core" classes.David -> LuvvleeJubblee , 20 Nov 2017 15:23Way to miss the point. Zuckerberg is poorly educated in understanding human behavior. I could've told these tech yokels exactly what was becoming of their practices.Declawed -> Tersena , 20 Nov 2017 15:21uberkunst -> capatriot , 20 Nov 2017 14:59God, I remember that feeling. Still on a modem and proudly watching people excitedly get into the Internet. And then I watched on in utter horror as they give away their real names. I didn't understand why people didn't understand. You can discard a mask - you can't discard your face!
It's no coincidence that the people I know who eschew things like Twitter and Facebook are the techy people who can remember the internet in the good ol' days when the maxim was "don't tell anyone anything about anything".And you fail to realize that your existence is not, never has and never will be an island that removes you from the rest of humanity. It is irrelevant to the rest of us if you volunteer to be ignorant of the rest of us, and yet you think that only if everyone else was like you the problem would be solved.Declawed , 20 Nov 2017 14:52
Sorry but, our existence is inherently governed by the fact that we are social animals and part of an Earth based biosphere and politically that requires we show more than smug diffidence. I realise that religions have spent the last 2000 years or so trying to separate us from each other and nature, by pretending we have individual souls far more important than our collective being, but that's not an excuse either.Zenovia Iordache -> capatriot , 20 Nov 2017 14:43Erm. The inevitable effect of connection-seeking in a low friction environment is called The Singularity and people have been warning about it for at least the last couple of decades now.
"While seemingly democratic at a superficial level, a system in which the lack of structure means that all voices carry equal weight, and yet popularity, not experience or intelligence, actually drives influence, is clearly in need of more refinement and thought than it was first given"
Congratulations. You've recognized the Problem. Now, if you really want to look smart, explain why nobody involved wants to implement the Solution...I have a feeling your poor friends get the Big picture while you dont. Trumps get elected while you are offline. Brexit happens while you are offline cause Cambridge Analytica and Farage .. well they work hard at protecting certain interests. And so on.. is about information wars and power. And their consequences on democracy. And you might not be immediately affected If you are white male and from an OK bakground. If you are privileged and well off maybe even your children will make it in the offline bubble.AsboSubject -> capatriot , 20 Nov 2017 14:28
But what about the rest?The UK history on democracy isn't exactly a roll call of enlightened thinking either. The only gains were made by often violent demonstrations by The Chartists and Suffragettes. But at least the UK never banned black people from voting.AsboSubject -> blandino , 20 Nov 2017 14:19You are not a nice person. Thinking that people you imagine aren't as intelligent or don't see the world the way you see it deserve dieing from poverty or opioid overdoses is quite unpleasant.rogerfgay , 20 Nov 2017 13:52Sure, pick on the engineers. They make more money than you do. But if your half-courage took a leap forward, you'd target the quarter-educated people who are driving this because they control the spending. But then, they're also the people you're asking for a job aren't they?capatriot -> blandino , 20 Nov 2017 13:41Wow, if there ever was an example of why Trump won, the utter and complete self righteousness of the American liberal, this post is it. Congratulations.capatriot , 20 Nov 2017 13:32
You never had a "democracy" ... or if you had one, it was in the very dim past and limited to propertied men ... in recent times, you've had a two-party oligarchy managed by military-tech corporations. Oh, those good old days of limited choice and Vietnam, how can we ever go back to those, amirite?Gosh, I guess they were not joking when they talked about the "global village" ... and anyone knows a village is full of gossip and half-truths.tommydog -> pipspeak , 20 Nov 2017 13:27
I feel like almost every other day i need to point out to my hyperventilating Russia-fearing friends that you all do realize that all of this online-ness is voluntary, right? That a person can have a complete and real existence with no Facebook profile, not Tweet, none of that? I'm one such person, and I work in tech.Are media companies prevented by regulation from reporting "fake news". In any supermarket you'll spot newspapers with headlines to the effect that "My Mother-in-Law is a Space Alien". Now, while I'd guess that is true some of the time, I have a hard time believing that there are really that many space aliens around harassing their earthling inlaws. I'm not aware that that reporting is regulated. Are you saying it is?blandino , 20 Nov 2017 12:53The vow claimed by Brin and other Google founders, "Do No Evil," should have been a warning. In a New Yorker piece on tech's influence on the election last summer, a Facebook employee was quoted as saying, "We joke about who we should give the election to." It has recently come out that as Apple, the most traitorous of all the giant tech corporations that are a product of the American educational system (before it was strangled by Republicans like Trump and Betsy DeVos), traitorous because they pay no corporate taxes in the U.S., had an opportunity to choose between making phones and PDAs addictive pleasure machines or responsible news devices. They chose addictive pleasures, because it's obviously more profitable, like McDonald's supersizing its French fries and sugary drinks.McNameeRing , 20 Nov 2017 12:42
They've created a generation of Americans who will swallow anything that's fed to them ("It must be true. I read it on the Internet."). These are the people who love Trump, who don't understand or care about the Constitution or the Bill of Rights and would probably vote against them in a referendum (which some Republicans have promoted as a new Constitutional Convention). Their minds have become morbidly obese, filled with Angry Birds and empty Twitter posts that leave them unable to comprehend ideas that take more than 140 characters to express.
Such people deserve their fate (poverty, death by opioids), but it's tragic and evil that they are wrecking the planet with climate change denial (which, of course, justifies unregulated pollution), science denial (in which Evangelical Christians commit the child abuse of denying evolution and trying to prohibit its teaching.Such Fake Christians also reject most of Jesus' liberal teachings.)
Here in the SF Bay Area it's hard to avoid knowing some of these techies. They aren't all clueless about social interaction, arrogant, selfish, and contemptuous of other people--only 90% of them. The remainder scratch their heads, smile, cash their paychecks and stock options, and retire to multimillion dollar ranches to write cookbooks and make wine.
So now we have a population of tech geeks who don't know much but think they know everything, who spout "Do No Evil," while doing the ultimate evil--making a world unsafe for democracy but a pleasure palace for the rich, using a technology that is a uniquely American product of an educational system that was once a shining example and is now in shambles to destroy the dream of democracy that America used to champion, but does no longer.
It makes the coming Chinese domination of the world seem like cosmic justice, doesn't it?More degrees in the humanities is no antidote to or remedy for amoral/harmful tech and those who create and market it. Nor is this a problem of white privilege and lack of inclusiveness -- minorities run after tech goodies with the same glee as everyone else.pipspeak , 20 Nov 2017 12:41
Schools and just about everyone are promoting STEM degrees as the way to a good job and prosperity, and I don't foresee anybody creating jobs for philosophers to warn us against new tech developments.
This is one of those dangers that people don't foresee. They only see it when it's happened. Now it has; depending on how bad the fallout, the pushback and regulation will follow. Not sure if it will be sufficient, though. Especially under an Administration with little respect for facts or truth while it pursues the maximum dollar gain from the government before skedaddling.If you've every hung out in Silicon Valley with techies you'd know that mild sociopathy is indeed likely part of the problem. But the argument that it's because their education lacked learning about history or society is a bit silly when you consider the bulk of the population has probably not studied such disciplines beyond high school and some of the greatest engineers who invented or built some of the most important creations in history lacked a degree in the humanities.LuvvleeJubblee -> Arular , 20 Nov 2017 12:40
What differentiates past engineering eras from present is political and societal will to ensure inventions are used for the good of humanity. In short, a lack of regulation in the face of rampant neo-liberal capitalism that has enthralled the politicians who should be looking out for the public, not themselves and their cronies.
Facebook et al should long ago have been classified as media companies and regulated as such. Start hitting Zuckerburg with billions in fines and/or the threat of regulating him out of business and you'd very quickly see those much vaunted algorithms and engineering prowess spring into action to tackle the fake news and propaganda epidemic.Ahh, yeah Aruler...thanks for that....I think....!LibertarianLeaning -> Dylan , 20 Nov 2017 12:39
If you read this article and his former article on the subject(a big if), then you would be able to enlighten us on exactly what Laughton means by such comments as below. I actually completed my degree and so am 'fully educated but still struggle with the logic:-
"the hero's education rendered him incapable of understanding the world into which he was born. For although he was supposed to be majoring in psychology at Harvard, the young Zuckerberg mostly took computer science classes until he started Facebook and dropped outElyFrog , 20 Nov 2017 12:26
Your post referenced economics, not social issues.
It seems that once the State expands to the size it is now (~43% of GDP is directly spent by government) then virtually everything becomes political: economics, politics, social.
(ps if i've got this horribly wrong and libertarianism as a word has just been coopted to mean 'minarchist' i apologise)
I suppose it depends on how you define "libertarian". I, and most of the theorists I read, see it as a quite broad label which stretches from anarchism at one (extreme) end, to small-state minarchism at the other.
And yes, I am "right-wing" in terms of economics (though fascism, typically described as a "far-right" movement, is actually quite far-left in terms of economics, which is why I try to avoid debating these matters in terms of left/right. But when people self-describe that way, one doesn't have much choice).
So, yes, I prefer no (or minimal) State involvement in areas of the economy that it is possible to have private suppliers compete against each other. So that includes healthcare (but not all healthcare; the time-critical nature of A&E services means they are not amenable to real competition), education, and various other things most people are used to having provided by their governments.
But the "natural monopolies" (things like roads/railways/pipelines/sewers) can't really be provided by competing suppliers, so it's reasonable that they are owned (but not necessarily run) by the State. So taxes need to be raised to pay for those things.
Unlike most minarchists, though, I see outright, allodial land ownership as unjustifiable (it's a capital good that no one created, and thus no-one can claim rightful ownership). So in that regard also I'm quite left-wing.Capitalists will do what capitalists do. So ignoring social consequences in the pursuit of money is baked-in. Doesn't matter what your education is. In fact, class has more to do with their blindness than the lack of a liberal arts education.Arular -> LuvvleeJubblee , 20 Nov 2017 12:15yeah, but if you read this article (big if) he's calling him 'half-educated' because he has a shoddy background in social systems that has left him ignorant of a vast body of historical knowledge and political theory, not because he didn't finish his degree. maybe you should try reading the article and/or writing comments relevant to it...TheNuclearOption , 20 Nov 2017 12:12If it were the Iate 15th century there would be a similar article decrying the printing press and if the 19th, the postage stamp. Newspapers have been targeting a partisan readership long before social media came along and all controlled & managed by humanities graduates. Conrad Black & Boris Johnson hardly exemplars of a solid grounding in humanities leading to informed decision making overcoming self interest.LuvvleeJubblee , 20 Nov 2017 12:08In a previous article, Naughton wrote:-Joy Dot -> CharleyTango , 20 Nov 2017 11:57He is now claiming that Zuckerberg is 'half-educated'. Just because he did not complete his degree?! This surely does not make him half-educated? Does that mean that those who do not have a degree are not educated? This smells a little of scholastic snobbery from our former Cambridge University graduate and Vice President !
this half-baked education has left him bewildered and rudderlessit's possible. it's also possible you choose to work for dummies... raise your gameWalkAmongUs -> rahs24 , 20 Nov 2017 11:56What's so appalling is that I don't even think they have the slightest inkling that what you've just posted is the absolute reality of these types.Dylan -> LibertarianLeaning , 20 Nov 2017 11:54
They are so convinced they're right, and that everything they think must prevail, that they simply ignore democracy and anything else that shows that they're actually completely wrong.You mean you're not economically right wing? Minimal taxes, less state intervention in the economy (including health), etc? Your post referenced economics, not social issues. Socially we agree on a lot, probably nearly everything to be honest - I'm all for legalising based on harm caused by drugs, less military, anti snooper's charter/surveillance, etc, but I like taxes and I like the NHS, and that is where I think you're right wing and I am left! (ps if i've got this horribly wrong and libertarianism as a word has just been coopted to mean 'minarchist' i apologise)JumpingSpider -> Joy Dot , 20 Nov 2017 11:53No, I dislike prejudice wherever I see it. It's destructive and it never helps.Clytamnestra Selena Dungen -> ViolaNeve , 20 Nov 2017 11:48....Yes, to a certain extent that can happen via reading, but the biggest check on privilege and self-satisfaction is actually engaging with actual other people who don't share that privilege. And that just isn't happening at Stanford and Harvard....ID507599 , 20 Nov 2017 11:39
As someone who grew up both first-world-poor and a nerd i cannot expres in words how much i hate that 'the elite' keeps insisting that *the truth* about life and love and everything can only be found in a mixture of greec classics and trips to india. You are only 'enlightened' if you have the time and money to read those books and make those trips and most importantly: if you come home from all that with the right opinions about detesting money, detesting xenophobia, etc.
they pat themselves on the back any time they listen to what they insist is 'an outsider' but is just someone of a different gender/color parroting back their own believes.
It ties in with what many of the fake-news-complainers are reluctant to discuss: there is an ocean of sociological/economic 'facts' that exist somewhere between 'easily-provable lie' and 'this may be a lie to the elite, but it is a true fact for the unwashed masses'. and in tandem with that: the uneasy questions about censorship that come with *any* attempt at regulating the press.
... ... ...This is too simple. The development of critical thought is the key thing and it isn't monopolized by any discipline. People without any qualifications and without much education can - and do - exercise critical ability. The problem is a cultural one. Consumerism and the pretend world in which people 'think' they can be what they want and live in make believe soaps is the problem.samuelrgates -> ianhurley17 , 20 Nov 2017 11:39Right? Wolfowitz was a student of Leo Strauss, Kissinger was a Kantian, Zuckerberg reportedly quotes Virgil in meetings, and Jonah Peretti wrote this piece of Marx-ish critical theory: http://www.datawranglers.com/datawranglers.com/negations/issues/96w/96w_peretti.htmlParisHiltonCommune -> Uncle_Paulie , 20 Nov 2017 11:20
We must reckon with the obviousness that the humanities are in no way an armor against "evil.""If you have an issue with tech giants messing around with your personal data, don't give them your personal data." They'll take your personal data, regardless. Because they make money from selling it.ParisHiltonCommune -> Edna Lora , 20 Nov 2017 11:18"A "liberal arts" education is now a selling point in some schools." Presumably schools from families so wealthy, the children will never have to worry about competing with 6 billion other people for a job someday.
Nov 24, 2017 | discussion.theguardian.com
ParisHiltonCommune , 20 Nov 2017 11:08Power and influence are not just a battle between STEM and Humanities, though. You've missed the MBA, Master of Business Admistration. They are the ones who control everything now.LibertarianLening -> Dylan , 20 Nov 2017 10:58
It may have been the case some decades ago, but now it is Managerialism, in the guise of a whole ideology that has sprung from MBA's, that rules over both the STEM and Humanities workers.
From mid- and large- private companies, to the public sector, they all speak the same language and it is the language of the MBA. Corporate visions of embracing customer focused cost control while empowering our core mission values.
Time for an article on Managerialism, as it is the air we breathe these days.ParisHiltonCommune -> VermontBede , 20 Nov 2017 10:55
Your username rather contradicts the assertions you make about your political orientation..
Well let's have a look at some typical libertarian policies. Recreational drugs decriminalised. The dismantling of the surveillance State. Stop covering for Israel's crimes in the UN. A much-reduced military that was for purely defensive purposes. How're they "right-wing", exactly?My recent example is saying "It's like Quixote tiltiing at windmills" only to find the others, 6 or 7 people all with Firsts in STEM had no idea what I was on about. Also saying "It's far too Heath-Robinson" had the same effect.LibertarianLeaning -> Vigil2010 , 20 Nov 2017 10:54
It does dismay me how clever many of my colleagues are, but how painfully narrow their knowledge is. They study their subject (and I suspect most of that is just for career development i.e. love of money rather than knowledge) but little else.
Our culture has a bad attitude to wisdom in general. Each generation is taught to disregard the old timers, what can they possibly know about anything?
I guess it's all how the plutocracy like it. Their media can tell us that the Crusades were a defensive war and nobody knows enough to disagree. They can continually role out nonsense about the "good guys and the evil guys" to explain world problems and again, nobody knows anything other than that.cguardian -> Travis , 20 Nov 2017 10:52
Democracy is a political philosophy. Socialism is an economic theory.
Socialism is not an "economic" theory. Socialism (and I use the term in its original, Marxist sense: State ownership & control of the means of production, distribution, and exchange) has absolutely no economic theory behind it. Nowhere did Marx tell his followers how to run their economies; after they'd won, the Bolsheviks and Maoists were on their own. No wonder millions starved. It's impossible to make rational economic calculations in a socialist commonwealth because there is no price signal mechanism. Hence communist countries' famous gluts and shortages.
At its height, despite the fact its economy was much simpler than any here in the West's, economists of the USSR were setting the prices of more than 5 million items, and even they admitted it would have been impossible without knowing (and copying) the prices that arose in our (relatively) free-market economies.
In fact, they joked that once "the revolution" was complete and communism had taken over the world, they'd be required to have some small country remain free-market capitalist so they could have some clue about what prices should be.
And I have no idea of who concocted the "famous quote".
Lulz. You walked into that one: Alexis de TocquevilleI can't up-vote this enough. MIT, for example, requires eight semesters of humanities for all undergraduates, regardless of major. If you talk to the faculty in the humanities dept, they'll tell you how much they enjoy teaching there, because they get really intelligent students who can think rigorously. (And also because they're almost all tenured professors -- not underpaid "adjuncts".)ParisHiltonCommune -> ViolaNeve , 20 Nov 2017 10:45
Yes, there are a certain percentage of students who meet the stereotype of being socially awkward and not very interested in thinking about things outside of their science and technology focus, but they're not the majority and are more than balanced by the bulk of the student body who could hold their own in any liberal arts program in the world.Great comment!CharleyTango -> Joy Dot , 20 Nov 2017 10:41
We live in a plutocracy and we get the tech that the plutocrats want us to have. Drives on diversity aren't working because those non-white-upper-middle-class-males who get the roles, are those who behave exactly the same as the white-upper-middle-class elite. So the changes are literally skin deep.Sadly, most of the women I've encountered at the top of the corporate tree have either been there through nepotism (e.g. MD's daughter or mistress) or been promoted way beyond their level of competence and have compensated for that with drink, drugs or appalling bullying.ianhurley17 , 20 Nov 2017 10:40
The educated, savvy women all seem to baled out long before they reach that level!Harvard required class of 1964 freshmen to read the published version "The Two Cultures" the summer before they matriculated. The general knowledge of college friends who were scientists and mathematicians (and went on to become university professors) was at least equal to other friends specializing in social sciences and humanities, because suburban American high schools in wealthy communities provide a good general education up to age 18, not 16 as in British public, comprehensive and grammar schools, and because American university courses require a large fraction of a student's course work lie outside their department of specialization.CharleyTango -> davidc929 , 20 Nov 2017 10:35
Snow wrote about the British system. He deplored the willful scientific ignorance of many members of the British Civil Service of this acquaintance. His comments were not intended for or relevant to the American experience. A bright American student, as these computer tech executives' work histories show they must have been, will have gained familiarity with both "cultures" by the time they started their college courses. Their college experiences will have built upon this familiarity.
In my opinion It is inappropriate to blame the failure to regulate internet speech properly upon the education of American tech leaders. Corbyn and whoever replaces Trump will remedy theunderlying issues because they know unregulated capitalism cannot be trusted to act responsibly.ID597727 , 20 Nov 2017 10:31True. "It's just what we asked for, but it's not what we want!", viz. Nimrod. And sometimes a supplier provides a system that they say is perfect for the task required, yet once it's installed it clearly is nothing of the sort. The customer's ex-MD retires to the sun, counting his backhander and giggling hysterically. I've encountered that more than once during my career, too.
But often the customers don't know exactly what they want and constantly want to make changes."A computer lets you make more mistakes faster than any other invention with the possible exceptions of handguns and Tequila."Themroc5 , 20 Nov 2017 10:30
-- Mitch RatcliffeSo what about those teaching and learning 'digital humanities', is this subject then a contradiction in terms? Surly these divides are redundant as subjects become multi disciplinary in our digital age, each will influence the other in new and interesting ways. There is no uninventing available to us here only the effort in rebalancing in how we value what it is to be human.Alonso Schneeweiss , 20 Nov 2017 10:25Oh, my - technology run amuck! So what's the solution? Oh yeah - more government.ViolaNeve , 20 Nov 2017 10:08Peter Cini -> phubar , 20 Nov 2017 10:01
First off, full disclosure: I'm in tech, so I'm an insider. I also absolutely agree that tech has a huge, huge problem with understanding the consequences of our actions. But it's a little bit naïve to act as though taking another year or two of humanities classes would magically prevent tech leaders from making antisocial products.
For one thing, more people in tech have humanities backgrounds than you might think (I do--I'm a software developer and educator with a BA from Stanford and am finishing an MSEE, and I have a fair number of colleagues with similarly mixed educational backgrounds). For another, Mark Zuckerberg founded Facebook when he was was what, 20? It's foolish to act like you can turn a 20-year-old, *any* 20-year-old, into a wise and thoughtful human who can understand all the consequences of their actions by sticking them in a classroom for another year or two. I certainly was a moron when I was 20. Shockingly, I was also a moron when I was 22. College kids just still have a lot of growing up to do.
Don't get me wrong, I work a lot with high schoolers and university students, and I'm a very big proponent of education. But the thing that makes the biggest difference in knocking adolescent heads is exposing kids to people that aren't like them. Yes, to a certain extent that can happen via reading, but the biggest check on privilege and self-satisfaction is actually engaging with actual other people who don't share that privilege. And that just isn't happening at Stanford and Harvard.
I'm white and the child of college-educated parents; at Stanford I still felt out of place, weird, and poor. I was surrounded by people who went to skiing in Switzerland at Christmas and had boats; it wasn't a world I was familiar with or understood. That effect is only magnified for kids of color or from more marginalized backgrounds, sprinkled lightly across classrooms that are overwhelmingly white and privileged. The idea that a white, middle-class kid -- even a gay female kid like me -- would be right near the bottom of the privilege scale I think tells you just about everything about that university culture that you need to know.
What's happening in tech is part of the sickness of our entire social and economic system; it's a toxic mixture of privilege perpetuating privilege, in terms of race and class and gender and money and access. Tech doesn't create antisocial products by itself. Having a lot of rich white kids sitting around discussing Plato in a classroom might make them more well-rounded on paper, but if you then still funnel them then into a money sea dominated by bro culture and VCs, with no necessity or encouragement to engage with people who live outside that bubble, you're still going to get people who are shocked, shocked!! to learn that their products have negative consequences for the lives of the people on the other side of the screen. Lots of *workers* in tech do partially bridge that gap, in one way or another. But the people at the top, making the decisions, are selected overwhelmingly by being white dudes who fit the "poorly socialized iconoclast" mold that VCs understand and then massively isolated by the enormous *heaps of cash* that investors have thrown at them to make something the investors think will get them the best return on their investment. *No part* of that is good for society writ large, beginning to end, in very large part because investors have no reason to care what happens to anyone else.
Here's an example! At this stage, anyone in tech who doesn't think that they're working on making every worker in the world, *including themselves*, obsolete, is deluding themselves. But most of us *do* know that and keep showing up for work, because we don't know any other way of paying our bills. We know that social and political action is needed, a lot of us are agitating for precisely that, but we can't do it on our own, and we have a pretty realistic idea about what kind of future lies for us and our families if we just decide to walk away from the industry. I'm a little too old to really be a millennial, but this is the rock and the hard place, for people even 3 years younger than I am, who graduated from college just in time for the crash: if you're in tech, you're keeping your head above water, barely. If you're not, you're working constantly with no benefits or security, just so you can live with your parents and form a punchline about avocados.
If you want to check tech, you need *political will.* You have to check the money, because it's never going to check itself. And if you want to make Silicon Valley actually become capable of making the utopian tech it likes to believe it can produce, it also wouldn't hurt to check the *overwhelming* bias in tech hiring and in elite education towards people who are white, privileged, and just like everybody else who's already there.No obligation to vote for the array of muts on the ballot. The last guy I voted for is Nader and he was kicked off the ballot in the 2004v electionBill Longenecker -> toomuch9 , 20 Nov 2017 10:00I once met a man in a Texas prison who was incarcerated for programming a banks software to divert small fractions of (rounded off) pennies to his personal account. Those added up fast enough to get noticed.Uncle Al Schwartz , 20 Nov 2017 10:00Trump is the quintessential Exceptional American, weaponized. The Trump Organization constructed more than 180 skyscrapers and major properties worldwide within every cesspool of political, military, religious, organized crime, and civil corruption. Trump is the toughest SOB on the planet - and the most experienced. And he's ours. I stand with Trump.Vigil2010 -> LibertarianLeaning , 20 Nov 2017 09:55Democracy is a political philosophy. Socialism is an economic theory. The two are not mutually exclusive. And I have no idea of who concocted the "famous quote".VermontBede , 20 Nov 2017 09:48When you refer to someone as "Machiavellian" does an engineer understand? In the US there used to be a required college course entitled "The History of Western Civilization". It formed a common bond somewhat like serving in the military.LibertarianLeaning , 20 Nov 2017 09:43Mirelle , 20 Nov 2017 09:37
"a liberal arts major familiar with works like Alexis de Tocqueville's Democracy in America, John Stuart Mill's On Liberty, or even the work of ancient Greek historians, might have been able to recognise much sooner the potential for the 'tyranny of the majority' or other disconcerting sociological phenomena that are embedded into the very nature of today's social media platforms..."
Such a person would most have likely held their nose and voted for Trump, knowing the appalling damage Hillary had done during her tenure in the State department.
The usual Graun assumption that it's only ignorance or selfishness that makes people eschew Leftists and their policies.
Sorry. Progressives are actually more ignorant about politics, economics and history, in my experience. I'm not "right-wing" myself but far more of my right-leaning friends are likely to know who de Tocqueville was and what he wrote than my Lefty friends.
And most of them will know this rather famous quote:
"Democracy extends the sphere of individual freedom, socialism restricts it. Democracy attaches all possible value to each man; socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude."Up to a point, Lord Copper.HiramsMaxim , 20 Nov 2017 09:34
The old "two cultures debate", which in my student days was conducted between FR Leavis and CP Snow, has not advanced very far. There is certainly something in it, but I suspect that the intellectuals of the sixteenth century, most of whom could be found in monasteries, complained that Gutenberg would never have pressed ahead so carelessly with printing using moveable type if he had had a proper grounding in Rhetoric and in Theology, instead of blacksmithing and goldsmithing...
After all... we went from Gutenberg printing in Strasbourg in 1445 to Martin Luther printing his 95 Theses in 1522...
I think we are seeing a similar democratisation of information today.
We can no more put the genie back in the bottle than could Sir Thomas More. If Zuckerberg, Page and Brin had not invented their money machines, someone else might have done so.
The only political leader who is actively trying to control the genie is Xi Jinping, and he may not be entirely successful in keeping up the Great Firewall of China.
I think we have to ride the wave, and keep in mind that political power itself is a matter of technology, as I am sure Marshal McLuhan would point out.
The Great Dictators of the last century were creatures of the radio and the cinema, which allowed them a one sided conversation with every household and made them bestride the silver screen.
Television replaced radio and cinema and with its more domestic scale it cut the monsters down to size and promoted democracy.
The social media have galvanised authoritarianism at the moment, but the wheels will continue to turn..Old model: People who disagree with me are wrong.rahs24 , 20 Nov 2017 09:31
New Model: People who disagree with me are stupid.
Oh, and a column in The Guardian defending Mill's On Liberty ? Priceless.
By the way, the entire premise of the column is flawed. Harvard, like all US colleges, has requirements that students take classes outside their major, including humanities. My tech prowess allowed to me find that out. :)Translation/TL;DR version:JayThomas , 20 Nov 2017 09:30
> Trump won despite the amount of shameless fear-mongering and short-selling we in the MSM did for Hillary and Dems.
> Tech companies did not do their part in preventing Trump victory by actively censoring everyone WE disagree with.
> We need OUR (SJW/Humanities/Marxist/LiberalArts) people to MANAGE/WATCHOVER these tech guys.
> Guys like Zucker/Brin/Page are not essentially evil, they are just not educate ENOUGH in SJW/Marxist agenda.
> Guys like Thiel are pure evil.
> WE KNOW BEST, hence, we must be allowed to control and manipulate what people think and how they act.Buck Brogan -> AVBrown , 20 Nov 2017 09:28
So what else could explain the astonishing naivety of the tech crowd? My hunch is it has something to do with their educational backgrounds. Take the Google co-founders. Sergey Brin studied mathematics and computer science. His partner, Larry Page, studied engineering and computer science. Zuckerberg dropped out of Harvard, where he was studying psychology and computer science, but seems to have been more interested in the latter.
Science should left in the hands of the political elite, who know what's best for the people.People need not be good at math to know when a politician is lying. By the humanities, they know a politician is lying because their lips are moving. lolJoe Applegate , 20 Nov 2017 09:23Every click we make, we are being gamed. We know it. And so we are partly to blame.Art Glick -> griz326 , 20 Nov 2017 09:11Head transplants? What news have you been watching?fortysomethingpa , 20 Nov 2017 09:07Said this before in a reply: Isn't there some responsibility on the part of the Humanities to give a more accurate portrayal of history and society? For example, shouldn't we all be well aware that the success of these tech giants is built on state-funded innovation? Shouldn't we all be less blind to how markets work? A stronger left might provide a clearer vision of how power works, but we have been silencing that hard left for years.fortysomethingpa -> HardWater , 20 Nov 2017 09:03Agree. But how about the fact that many educated people do not know that much of the technology and innovation behind this wealth was state-funded and not "sexy" Isn't it the job of the liberal arts - history, sociology, government classes to address the role of the state in innovation? We are blinded by a worshipful attitude toward the market. Without a strong left it seems we have lost sight of reality. Isn't this partially the fault of Humanities departments?LibertineUSA , 20 Nov 2017 09:03Normally I don't single out greedy business leaders to take the blame for society's woes. It is the fault of our political leaders for allowing them to damage society in their chase for the almighty dollar (or billions of them)...Libertarians, conservatives and centrist Dems to be exact.Joy Dot -> JumpingSpider , 20 Nov 2017 09:02
But in this case I think the criticism is spot on since these tech nerds keep on claiming their products will make the country and world a better place. Time to kill the meme that capitalists and business people are bested suited morally to lead the world in the 21st Century.as men have ignored their own unpleasant prejudice for EVER i have no doubt it'll be easy for you to ignore mineJayThomas , 20 Nov 2017 08:59
both are a factor. main obstacle here and now being the appalling behaviour of the low-road lesser halffortysomethingpa -> Gwyndaf , 20 Nov 2017 08:56
"It never seems to have occurred to them that their advertising engines could also be used to deliver precisely targeted ideological and political messages to voters." That was supposed to be reserved for exclusive use of the Democratic Party.One of the changes (still happening) in literature, psychology, sociology, and philosophy departments is a focus on privilege, "the other", subjugation, the power of elites . . . So studying the humanities may involve a critique - at least a consciousness - of one's privilege. Not familiar with Snow but there is plenty of lit crit and theory to dismantle or at least challenge the canon.threesheds -> Uncle_Paulie , 20 Nov 2017 08:52I guess the problem being referred to in this article that there are negative implications for all of us because many people's opinions are shaped by what they read on social media. What all of us read is biased in ways that it is difficult to trace the source of that bias. In "the good old days" at least most people tended to know the biases of the newspapers and TV news that you consumed, but now you can be biased by what your friends share with you on social media, or what google choses to show you in search results but there is no way of knowing the source of those biases. The problem therefore goes far beyond the risks of sharing personal data.maricaangela -> SardinesForDinner , 20 Nov 2017 08:45Yes, I agree and I wasn't disparaging the STEM subjects at all or equating them in some way with capitalist interests. Both can have that criticism applied to them - for instance, historians can definitely twist facts and more or less propagandise events. Both are necessary, but I was thinking that both need to have at least a grasp of the influence and range of the other and be better educated to do that.Alex Newman , 20 Nov 2017 08:44Ditto bankers, doctors, lawyers and journalists.... The world (and particularly the US) is full of specialists. The author's assertions are naive and half-educated.griz326 , 20 Nov 2017 08:41Nonsense! You were just filling your word count with provocative poo.Edna Lora -> mollypicon , 20 Nov 2017 08:34
Every technology has a good side and a bad one - including and especially the medical arts. Consider the recent news regarding successful head transplants and face transplants; where will that takes us when humanitarian uses fail to pay the bills???One book does not make the man. The point is many private and public schools focus on STEM to the detriment of humanities. A "liberal arts" education is now a selling point in some schools.toomuch9 -> gordonashworth , 20 Nov 2017 08:21Totally understand your point. As a non-tech individual who has been hostile to this massive organization of information and its consequent requirements to alter human thought and social patterns to use systems, it is certainly expected that designers would demand compliance from all parties for their own purposes. Even in the SF Chronicle, i often read quips about programmers disguising coding for their own private use. In SF some loose canon but brilliant guy was asked to redesign the city's computer systems. He had total mental breakdown and was jailed for some sort of bizarre infraction that had something to do with unauthorized personal use. I can't quite remember details. The Chron offered to the public that the City may never know what this guy designed into the systems. Bottom line was the city employees were totally delighted about their new programs and the programmer wouldn't talk. If i remember correctly he was this eccentric, well liked gay guy.mollypicon , 20 Nov 2017 08:16Horseshit! I read De Toqueville in high school. There are required humanities courses at good universities. And anyone can read a book on one's own time.harshlight , 20 Nov 2017 08:16I agree with your overall assessment of the tech owners. However, blaming their academic discipline is short sighted. I suggest you get to know some math and computer science majors. Many are well versed in the humanities. Not everyone needs a degree in liberal arts to understand the human race.chingpingmei , 20 Nov 2017 08:02
Perhaps you are referring to the culture of technology that bred a lack of insight into human behavior.
There are also people with degrees in the liberal arts who go into technological fields. I agree with your views on the naïveté of the tech leaders, but blaming a college degree strikes me as looking for a parallel that doesn't exist.The writer clearly does not know much about the US higher education system where engineers and scientists cannot get away without taking humanities courses, unlike the UK.Joseph_Ryan , 20 Nov 2017 08:02I would say that a deep study of the humanities can impart the kind of pessimism about human nature that animated Madison, Jefferson and the other Framers of the Constitution. Their pessimism, unlike the unrestrained optimism of their counterparts in France, is what enabled this country to be one of the few to survive a revolution without descending into mass murder and tyranny. But given their fundamental pessimism, the founders of this country would probably be surprised that the governmental structure they designed had endured this long.Uncle_Paulie , 20 Nov 2017 08:00Many of today's 'tech-elite' are sons of rich, establishment types who only have one interest: making more money. By the time reports leek this appear, they already have a private island and a few billion in the bank. If you have an issue with tech giants messing around with your personal data, don't give them your personal data.gitsumomma , 20 Nov 2017 07:55I would like to congratulate the vast majority of the people posting here on producing possibly the most thoughtful and considered set of comments I have read on a Guardian Article.richardmuu -> Alison Cartwright , 20 Nov 2017 07:48
I will give the Article credit for stimulating the debate but I do think the discussion BTL has been far more interesting than the original.Alison I agree, but because the number of arts and sciences students is declining, arts and sciences faculty try to isolate integrated studies (often called general studies or, at my university, the core curriculum) from professional studies. They do this to try to save their jobs so it's understandable. The end results are sporadic, half-hearted attempts at integration that don't exactly foster aha moments. Rather they cultivate thinking such as we see in this article.Mujokan -> worried , 20 Nov 2017 07:46The original backers of the "wired" world (such as Stewart Brand and Kevin Kelly who founded Wired, but one could list dozens of tech legends) were utopian thinkers who were very well versed in history and philosophy. Unfortunately but probably inevitably, the whole thing was corrupted by corporations as it became part of mainstream consumer society.
Nov 22, 2017 | www.nakedcapitalism.com
Posted on November 21, 2017 by Yves Smith Yves here. Reader UserFriendly sent this post with the message, "I can confirm this." I can too. And before you try to attribute our reactions to being Americans, note that the study very clearly points out that its finding have been confirmed in "all of the world's regions".
By Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity at the University of Newcastle, NSW, Australia. Originally published at billy blog
Here is a summary of another interesting study I read last week (published March 30, 2017) – Happiness at Work – from academic researchers Jan‐Emmanuel De Neve and George Ward. It explores the relationship between happiness and labour force status, including whether an individual is employed or not and the types of jobs they are doing. The results reinforce a long literature, which emphatically concludes that people are devastated when they lose their jobs and do not adapt to unemployment as its duration increases. The unemployed are miserable and remain so even as they become entrenched in long-term unemployment. Further, they do not seem to sense (or exploit) a freedom to release some inner sense of creativity and purpose. The overwhelming proportion continually seek work – and relate their social status and life happiness to gaining a job, rather than living without a job on income support. The overwhelming conclusion is that "work makes up such an important part of our lives" and that result is robust across different countries and cultures. Being employed leads to much higher evaluations of the quality of life relative to being unemployed. And, nothing much has changed in this regard over the last 80 or so years. These results were well-known in the 1930s, for example. They have a strong bearing on the debate between income guarantees versus employment guarantees. The UBI proponents have produced no robust literature to refute these long-held findings.
While the 'Happiness Study' notes that "the relationship between happiness and employment is a complex and dynamic interaction that runs in both directions" the authors are unequivocal:
The overwhelming importance of having a job for happiness is evident throughout the analysis, and holds across all of the world's regions. When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed. The importance of having a job extends far beyond the salary attached to it, with non-pecuniary aspects of employment such as social status, social relations, daily structure, and goals all exerting a strong influence on people's happiness.
And, the inverse:
The importance of employment for people's subjective wellbeing shines a spotlight on the misery and unhappiness associated with being unemployed.
There is a burgeoning literature on 'happiness', which the authors aim to contribute to.
They define happiness as "subjective well-being", which is "measured along multiple dimensions":
life evaluation (by way of the Cantril "ladder of life"), positive and negative affect to measure respondents' experienced positive and negative wellbeing, as well as the more domain-specific items of job satisfaction and employee engagement. We find that these diverse measures of subjective wellbeing correlate strongly with each other
Cantril's 'Ladder of Life Scale' (or "Cantril Ladder") is used by polling organisations to assess well-being. It was developed by social researcher Hadley Cantril (1965) and documented in his book The pattern of human concerns .
You can learn more about the use of the 'Cantril Ladder' HERE .
As we read, the "Cantril Self-Anchoring Scale consists of the following":Please imagine a ladder with steps numbered from zero at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time? (ladder-present) On which step do you think you will stand about five years from now? (ladder-future)
[Reference: Cantril, H. (1965) The pattern of human concerns , New Brunswick, Rutgers University Press.]
Christian Bjørnskov's 2010 article – How Comparable are the Gallup World Poll Life Satisfaction Data? – also describes how it works.
[Reference: Bjørnskov, C. (2010) 'How Comparable are the Gallup World Poll Life Satisfaction Data?', Journal of Happiness Studies , 11 (1), 41-60.]
The Cantril scale is usually reported as values between 0 and 10.
The authors in the happiness study use poll data from 150 nations which they say "is representative of 98% of the world's population". This survey data is available on a mostly annual basis since 2006.
The following graph (Figure 1 from the Study) shows "the self-reported wellbeing of individuals around the world according to whether or not they are employed."
The "bars measure the subjective wellbeing of individuals of working age" by employment status .
The results show the differences between having a job and being unemployed are "very large indeed" on the three well-being measures (life evaluation, positive and negative affective states).
People employed "evaluate the quality of their lives around 0.6 points higher on average as compared to the unemployed on a scale from 0 to 10."
The authors also conduct more sophisticated (and searching) statistical analysis (multivariate regression) which control for a range of characteristics (gender, age, education, marital status, composition of household) as well as to "account for the many political, economic, and cultural differences between countries as well as year-to-year variation".
The conclusion they reach is simple:
the unemployed evaluate the overall state of their lives less highly on the Cantril ladder and experience more negative emotions in their day-to-day lives as well as fewer positive ones. These are among the most widely accepted and replicated findings in the science of happiness Here, income is being held constant along with a number of other relevant covariates, showing that these unemployment effects go well beyond the income loss associated with losing one's job.
These results are not surprising. The earliest study of this sort of outcome was from the famous study published by Philip Eisenberg and Paul Lazersfeld in 1938. [Reference: Eisenberg, P. and Lazarsfeld, P. (1938) 'The psychological effects of unemployment', Psychological Bulletin , 35(6), 358-390.]
They explore four dimensions of unemployment:
I. The Effects of Unemployment on Personality.
II. Socio-Political Attitudes Affected by Unemployment.
III. Differing Attitudes Produced by Unemployment and Related Factors.
IV. The Effects of Unemployment on Children and Youth.
On the first dimension, they conclude that:
1. "unemployment tends to make people more emotionally unstable than they were previous to unemployment".
2. The unemployed experience feelings of "personal threat"; "fear"; "sense of proportion is shattered"; loss of "common sense of values"; "prestige lost in own eyes and as he imagines, in the eyes of his fellow men"; "feelings of inferiority"; loss of "self-confidence" and a general loss of "morale".
Devastation, in other words. They were not surprised because they note that:
in the light of the structure of our society where the job one holds is the prime indicator of status and prestige.
This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings. That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study in 1938.
It might change over time but that will take a long process of re-education and cultural shift. Trying to dump a set of new cultural values that only a small minority might currently hold to onto a society that clearly still values work is only going to create major social tensions. Eisenberg and Lazarsfeld also considered an earlier 1937 study by Cantril who explored whether "the unemployed tend to evolve more imaginative schemes than the employed".
[Reference: Cantril, H. (1934) 'The Social Psychology of Everyday Life', Psychological Bulletin , 31, 297-330.]
The proposition was (is) that once unemployed, do people then explore new options that were not possible while working, which deliver them with the satisfaction that they lose when they become jobless. The specific question asked in the research was: "Have there been any changes of interests and habits among the unemployed?" Related studies found that the "unemployed become so apathetic that they rarely read anything". Other activities, such as attending movies etc were seen as being motivated by the need to "kill time" – "a minimal indication of the increased desire for such attendance".
On the third dimension, Eisenberg and Lazersfeld examine the questions – "Are there unemployed who don't want to work? Is the relief situation likely to increase this number?", which are still a central issue today – the bludger being subsidized by income support.
They concluded that:
the number is few. In spite of hopeless attempts the unemployed continually look for work, often going back again and again to their last place of work. Other writers reiterate this point.
So for decades, researchers in this area, as opposed to bloggers who wax lyrical on their own opinions, have known that the importance of work in our lives goes well beyond the income we earn. The non-pecuniary effects of not having a job are significant in terms of lost status, social alienation, abandonment of daily structure etc, and that has not changed much over history. The happiness paper did explore "how short-lived is the misery associated with being out of work" in the current cultural settings.
The proposition examined was that:
If the pain is only fleeting and people quickly get used to being unemployed, then we might see joblessness as less of a key public policy priority in terms of happiness.
They conclude that:
a number of studies have demonstrated that people do not adapt much, if at all, to being unemployed there is a large initial shock to becoming unemployed, and then as people stay unemployed over time their levels of life satisfaction remain low . several studies have shown that even once a person becomes re-employed, the prior experience of unemployment leaves a mark on his or her happiness.
So there is no sudden or even medium-term realisation that being jobless endows the individual with a new sense of freedom to become their creative selves, freed from the yoke of work. To bloom into musicians, artists, or whatever.
The reality is that there is an on-going malaise – a deeply entrenched sense of failure is overwhelming, which stifles happiness and creativity, even after the individual is able to return to work.
This negativity, borne heavily by the individual, however, also impacts on society in general.
The paper recognises that:
A further canonical finding in the literature on unemployment and subjective wellbeing is that there are so-called "spillover" effects.
High levels of unemployment "increase fear and heighten the sense of job insecurity". Who will lose their job next type questions?
The researchers found in their data that the higher is the unemployment rate the greater the anxiety among those who remain employed.
The overwhelming conclusion is that "work makes up such an important part of our lives" and that result is robust across different countries and cultures.
Being employed leads to much higher evaluations of the quality of life relative to being unemployed.
The unemployed are miserable and remain so even as they become entrenched in long-term unemployment. They do not seem to sense (or exploit) a freedom to release some inner sense of creativity and purpose.
The overwhelming proportion continually seek work – and relate their social status and life happiness to gaining a job, rather than living without a job on income support.
Modern Monetary Theory (MMT) allows us to understand that it is the government that chooses the unemployment rate – it is a political choice.
For currency-issuing governments it means their deficits are too low relative to the spending and saving decisions of the non-government sector.
For Eurozone-type nations, it means that in surrendering their currencies and adopting a foreign currency, they are unable to guarantee sufficient work in the face of negative shifts in non-government spending. Again, a political choice.
The Job Guarantee can be used as a vehicle to not only ensure their are sufficient jobs available at all times but also to start a process of wiping out the worst jobs in the non-government sector.
That can be done by using the JG wage to ensure low-paid private employers have to restructure their workplaces and pay higher wages and achieve higher productivity in order to attract labour from the Job Guarantee pool.
The Series So Far
This is a further part of a series I am writing as background to my next book with Joan Muysken analysing the Future of Work . More instalments will come as the research process unfolds.
The series so far:
- When Austrians ate dogs .
- Employment as a human right .
- The rise of the "private government .
- The evolution of full employment legislation in the US .
- Automation and full employment – back to the 1960s .
- Countering the march of the robots narrative .
- Unemployment is miserable and does not spawn an upsurge in personal creativity .
The blogs in these series should be considered working notes rather than self-contained topics. Ultimately, they will be edited into the final manuscript of my next book due in 2018. The book will likely be published by Edward Elgar (UK).
That is enough for today!
divadab , November 21, 2017 at 6:11 amThe Rev Kev , November 21, 2017 at 6:35 am
Perhaps I'm utterly depressed but I haven't had a job job for over 5 years. Plenty of work, however, more than I can handle and it requires priorisation. But I am deliberately not part of the organized herd. I stay away from big cities – it's scary how managed the herd is in large groups – and I suppose that unemployment for a herd animal is rather distressing as it is effectively being kicked out of the herd.
Anyway my advice, worth what you pay for it but let he who has ears, etc. – is to go local, very local, grow your own food, be part of a community, manage your own work, and renounce the energy feast herd dynamics. "Unemployment", like "recession", is a mechanism of control. Not very practical advice for most, I realize, trapped in the herd as they are in car payments and mortgages, but perhaps aspirational?nonclassical , November 21, 2017 at 10:24 am
I think what is missing from this article is the term "identity." If you meet new people, often the conversation starts with what you do for a living. Your identity, in part, is what you do. You can call yourself a plumber, a writer, a banker, a consultant, a reporter but the point is this is part of your identity. When you lose your job long term, your identity here loses one of its main anchor points.
Worse, there is a deliberate stigma attached with being long term unemployed. In that article you have seen the word bludger being used. In parts of the US I have read of the shame of 'living off the county'. And yes, I have been there, seen that, and got the t-shirt. It's going to be interesting as mechanization and computers turn large portions of the population from workers to 'gig' workers. Expect mass demoralization.jrs , November 21, 2017 at 12:13 pm
yes the lives many of us have lived, no longer exist though we appear not notice, as we "can" live in many of same "ways" ..rather well known psychologist defined some 40 years ago, best to "drop through cracks"sgt_doom , November 21, 2017 at 2:20 pm
Well, you also lose money, maybe you become homeless etc. as you have nowhere else to turn (if there are kids involved to support it gets even scarier though there are some programs). Or maybe you become dependent on another person(s) to support you which is of course degrading as you know you must rely on them to live, whether it's a spouse or lover when you want to work and bring in money, or mom and dads basement, or the kindest friend ever who lets you sleep on their couch. I mean these are the things that really matter.
Privileged people whose main worry in unemployment would be losing identity, wow out of touch much? Who cares about some identity for parties, but the ability to have a stable decent life (gig work hardly counts) is what is needed.jgordon , November 21, 2017 at 7:08 pm
I believe your comment sums up the situation the best -- and most realistically.skippy , November 22, 2017 at 12:45 am
I normally wouldn't comment like this, but you have brought up some extremely important points about identity that I would like to address.
Recently I had the most intense mushroom experience of my entire life–so intense that my identity had been completely stripped and I was left in a formless state, at the level of seeing my bare, unvarnished animal neural circuitry in operation. Suddenly with a flash of inspiration I realized that the identity of everyone, all of us, is inextricably tied up in what we do and what we do for other people.
Following from that, I understood that if we passively rely on others for survival, whether it be relying on friends, family, or government, then we do not have an identity or reason for existing. And the inner self, the animal core of who we are, will realise this lack of identity (even if the concious mind denies it), and will continually generate feelings of profound depression and intense nihilism that will inevitably destroy us if the root cause is not addressed.
Before this experience I was somewhat ambivalent about my politics, but immediately after I knew that the political right was correct on everything important, from attitudes on sex to economic philosophy. People need a core of cultural stability and hard work to grow and become actualized. The alternative is rudderless dissatisfaction and envy that leads nowhere.
On the topic of giving "out of kindnes and goodwill", giving without demanding anything in return is a form of abuse, as it deprives those who receive our feel-good generosity the motivation to form a coherent identity. If the parents of a basement-dweller were truly good people, instead of supporting said dweller they'd drag her out by the ear and make her grow food in the yard or some such. Likewise, those who have supported you without also giving concrete demands and expecations in return have been unkind, and for your own good I hope that you will immediately remove yourself from their support. On the other hand, if you have been thoughtlessly giving because it warms the cockles of your heart, then stop it now. You are ruining other people this way, and if your voting habits are informed by this kind of malevolence I'd encourage you to change those as well.
Anyway the original poster is right about everything. Working and having a purpose in life is an entirely different animal from making money and being "successful" in the government-sponsored commercial economy. Society and government deliberately try to conflate the two for various reasons, primarily graft of labor and genius, but that is only a deliberate mis-framing that needlessly harms people when the mainstream economic system is in catastrophic decline, as ours is today. You should try to clear up this misconception within yourself as a way of getting better.
Well, I hope this message can give you a few different thoughts and help you find your way out of the existential angst you're caught in. Don't wallow in helplessness. Think of something useful to do, anything, whether it earns you money or not, and go out and start doing it. You'll be surprised at how much better you feel about yourself in no time.Jeremy Grimm , November 21, 2017 at 12:33 pm
The problem is you said – I – had an extreme experience [burning bush], the truth was reviled to – I – and I alone during this extreme chemically altered state. Which by the way just happens to conform to a heap of environmental biases I collected. This is why sound methodology demands peer review. disheveled some people think Mister Toads Wild ride at Disneyland on psychotropics is an excellent adventure too.Henry Moon Pie , November 21, 2017 at 7:00 am
I think your observation about the importance of work to identity is most perceptive. This post makes too little distinction between work and a job and glosses over the place of work in defining who we are to ourselves and to others. I recall the scene in the movie "About a Boy" when the hero meets someone he cares about and she asks him what he does for a living.
I believe there's another aspect of work -- related to identity -- missing in the analysis of this post. Work can offer a sense of mission -- of acting as part of an effort toward a larger goal no individual could achieve alone. However you may regard the value in putting man on the moon there is no mistaking the sense of mission deeply felt by the engineers and technicians working on the project. What jobs today can claim service to a mission someone might value?ambrit , November 21, 2017 at 8:29 am
Agreed on your points. Wage slavery is nothing to aspire to. Self-determination within a context of an interdependent community is a much better way to live. We do our thing in the city, however.UserFriendly , November 21, 2017 at 10:10 am
Finding that "interdependent community" is the hard part. My experience has been that this endeavour is almost chance based; Serendipity if you will.
Here Down South, the churches still seem to have a stranglehold on small and mid scale social organization. One of the big effects of 'churching' is the requirement that the individual gave up personal critical thinking. Thus, the status quo is reinforced. One big happy 'Holy Circlejerk.'FelicityT , November 21, 2017 at 3:07 pm
from the article
This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings.
That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study in 1938. It might change over time but that will take a long process of re-education and cultural shift. Trying to dump a set of new cultural values that only a small minority might currently hold to onto a society that clearly still values work is only going to create major social tensions.Yves Smith Post author , November 21, 2017 at 4:23 pm
I would agree about the entenched cultural norms, etc. But not the pessimism and timeline for change. An individual can communicate a complex idea to millions in seconds, things move fast these days.
For me, it seems that what we (we being UBI/radical change proponents) are lacking is a compelling easily accessible story. Not just regarding UBI (as that is but one part of the trully revolutionary transformations that must occur) but encompassing everything.
We have countless think pieces, bits of academic writing, books, etc that focus on individual pieces and changes in isolation. But we've largely abandoned the all-encompassing narrative, which at their heart is precisely what religion offers and why it can be so seductive, successful, and resilient for so long.
The status quo has this type of story, it's not all that compelling but given the fact that it is the status quo and has inertia and tradition on its side (along with the news media, political, entertainment, etc) it doesn't have to be.
We need to abandon the single narrow issue activism that has become so prominent over the years and get back to engaging with issues as unseparable and intimately interconnected.
Tinkering around the edges will do nothing, a new political religion is what is required.FelicityT , November 21, 2017 at 5:11 pm
Sorry, I disagree vehemently. Deeply held cultural attitudes are very slow to change and the study found that work being critical to happiness examined a large number of societies.
Look at feminism. I was a half-generation after the time when women were starting to get a shot at real jobs. IIRC, the first class that accepted women at Harvard Law School was in the 1950 and at Harvard Business School, 1965. And the number of first attendees was puny. The 1965 class at HBS had 10 8 women out of a graduating class of over 800; my class in 1981 had only 11% women.
In the 1980s, you saw a shift from the belief that women could do what men could do to promotion of the idea that women could/should be feminine as well as successful. This looked like seriously mixed messages, in that IMHO the earlier tendency to de-emphasize gender roles in the workplace looked like a positive development.
Women make less than 80% of what men do in the US. Even female doctors in the same specialities make 80% of their male peers.
The Speenhamland in the UK had what amounted to an income guarantee from the 1790s to 1832. Most people didn't want to be on it and preferred to work. Two generations and being on the support of local governments was still seen as carrying a stigma.
More generally, social animals have strongly ingrained tendencies to resent situations they see as unfair. Having someone who is capable of working not work elicits resentment from many, which is why most people don't want to be in that position. You aren't going to change that.
And people need a sense of purpose. There are tons of cases of rich heirs falling into drug addiction or alcoholism and despair because they have no sense of purpose in life. Work provides that, even if it's mundane work to support a family. That is one of the great dissservices the Democrats have done to the citizenry at large: sneering at ordinary work when blue-collar men were the anchors of families and able to take pride in that.Yves Smith Post author , November 21, 2017 at 8:34 pm
So a few points.
Regarding the large number of societies, we often like to think we're more different than we actually are focusing on a few glaringly obvious differences and generalizing from there. Even going back a few hundred years when ideas travelled slower we were still (especially the "west" though the "east" wasn't all that much more different either) quite similar. So I'm less inclined to see the large number of societies as evidence.
Generally on societal changes and movements: The issue here is that the leadership has not changed, they may soften some edges here or there (only to resharpen them again when we're looking elsewhere) but their underlying ideologies are largely unchanged. A good mass of any population will go along to survive, whether they agree or not (and we find increasing evidence that many do not agree, though certainly that they do not agree on a single alternative).
It may be impossible to implement such changes in who controls the levers of power in a democratic fashion but it also may be immoral not implement such changes. Of course this is also clearly a similar path to that walked by many a demonized (in most cases rightfully so) dictator and despot. 'Tread carefully' are wise words to keep in mind.
Today we have a situation which reflects your example re: social animals and resentment of unfairness: the elite (who falls into this category is of course debatable, some individuals moreso than others). But they have intelligently, for their benefit, redirected that resentment towards those that have little. Is there really any logical connection between not engaging in wage labor (note: NOT equivalent to not working) and unfairness? Or is it a myth crafted by those who currently benefit the most?
That resentment is also precisely why it is key that a Basic income be universal with no means testing, everyone gets the same.
I think we should not extrapolate too much from the relatively small segment of the population falling into the the inherited money category. Correlation is not causation and all that.
It also seems that so often individuals jump to the hollywood crafted image of the layabout stoner sitting on the couch giggling at cartoons (or something similarly negative) when the concept of less wage labor is brought up. A reduction of wage labor does not equate to lack of work being done, it simply means doing much of that work for different reasons and rewards and incentives.
As I said in the Links thread today, we produce too much, we consume too much, we grow too much. More wage labor overall as a requirement for survival is certainly not the solution to any real problem that we face, its a massively inefficient use of resources and a massive strain on the ecosystems.WobblyTelomeres , November 21, 2017 at 8:53 pm
I am really gobsmacked at the sense of entitlement on display here. Why are people entitled to an income with no work? Being an adult means toil: cleaning up after yourself, cleaning up after your kids if you have them, if you are subsistence farmer, tending your crops and livestock, if you are a modern society denizen, paying your bills and your taxes on time. The idea that people are entitled to a life of leisure is bollocks. Yet you promote that.
Society means we have obligations to each other. That means work. In rejecting work you reject society.
And the touting of "creativity" is a top 10% trope that Thomas Frank called out in Listen, Liberal. It's a way of devaluing what the bottom 90% do.flora , November 21, 2017 at 9:38 pm
My argument with the article is that, to me, it smacks of Taylorism. A follow-on study would analyze how many hours a laborer must work before the acquired sense of purpose and dignity and associated happiness began to decline. Would it be 30 hours a week of backbreaking labor before dignity found itself eroded? 40? 50? 60? When does the worker break? Just how far can we push the mule before it collapses?
The author alludes to this: "The overwhelming proportion relate their social status and life happiness to gaining a job"
Work equals happiness. Got it.
But, as a former robotics instructor, and as one who watches the industry (and former students), I see an automated future as damn near inevitable. Massive job displacement is coming, life as a minimum wage burger flipper will cease, with no future employment prospects short of government intervention (WPA and CCC for all, I say). I'm not a Luddite, obviously, but there are going to be a lot of people, billions, worldwide, with no prospect of employment. Saying, "You're lazy and entitled" is a bit presumptuous, Yves. Not everyone has your ability, not everyone has my ability. When the burger flipping jobs are gone, where do they go? When roombas mop the floors, where do the floor moppers go?nihil obstet , November 21, 2017 at 10:05 pm
"WPA and CCC for all, I say. "
We could use a new Civilian Conservation Corps and and a Works Progress Administration. There's lots of work that needs doing that isn't getting done by private corporations.WobblyTelomeres , November 21, 2017 at 10:14 pm
The outrage at non-work wealth and income would be more convincing if it were aimed also at owners of capital. About 30% of national income is passive -- interest, rents, dividends. Why are the owners of capital "entitled to an income with no work?" It's all about the morality that underlies the returns to capital while sugaring over a devaluation of labor. As a moral issue, everyone should share the returns on capital or we should tax away the interest, rents, and dividends. If it's an economic issue, berating people for their beliefs isn't a reason.Yves Smith Post author , November 22, 2017 at 2:27 am
Why are the owners of capital "entitled to an income with no work?"
THIS!!!! So much, THIS!!!! But, what else is a Wobbly to say, eh?IsotopeC14 , November 22, 2017 at 2:58 am
The overwhelming majority do work. The top 0.1% is almost entirely private equity managers who are able to classify labor income as capital gains through the carried interest loophole. Go look at the Forbes 400.
The 1% are mainly CEOs, plus elite professionals, like partners at top law and consulting firms and specialty surgeons (heart, brain, oncology). The CEOs similarly should be seen as getting labor income but have a lot of stock incentive pay (that is how they get seriously rich) which again gets capital gains treatment.
You are mistaking clever taking advantage of the tax code for where the income actually comes from. Even the kids of rich people are under pressure to act like entrepreneurs from their families and peers. Look at Paris Hilton and Ivanka as examples. They both could have sat back and enjoyed their inheritance, but both went and launched businesses. I'm not saying the kids of the rich succeed, or would have succeed to the extent they do without parental string-pulling, but the point is very few hand their fortune over to a money manager and go sailing or play the cello.IsotopeC14 , November 22, 2017 at 1:34 am
Isn't the brother of the infamous Koch duo doing exactly that? Actually, if all the .001%ers were like him, we'd all be better offflora , November 21, 2017 at 9:09 pm
What's your take on Rutger Bergman's ted talk? i think most jobs aren't real jobs at all, like marketing and ceo's. why can't we do 20 hour work weeks so we don't have huge amounts of unemployment? Note, I was "unemployed" for years since "markets" decide not to fund science in the US. Yay Germany At least I was fortunate enough to not be forced to work at Walmart or McDonalds like the majority of people with absolutely no life choices. Ah the sweet coercion of capitalism.Andrew Dodds , November 22, 2017 at 2:48 am
Your hopes for a UBI are undone by some of the real world observations I've made over many years, with regard to how a guaranteed income increase, of any measure, for a whole population of an area, affects prices. Shorter: income going up means prices are raised by merchants to capture the new income.
- Examples: A single industry town raises wages for all employees by 2% for the new calendar year. Within the first 2 weeks of the new year, all stores and restaurants and service providers in the town raise their prices by 2%. This happens every year there is a general wage increase.
- Example: Medicare part D passes and within 2 years, Pharma now having new captive customers whose insurance will pay for drugs, raise prices higher and higher, even on generic drugs.
- A more recent example: ACA passes with no drug price ceilings. Again, as with the passage of Medicare part D, Pharma raises drug prices to unheard of levels, even older and cheap but life saving drugs, in the knowledge that a new, large group will have insurance that will pay for the drugs – a new source of money.
Your assumption that any UBI would not be instantly captured by raised prices is naive, at best. It's also naive to assume companies would continue to pay wages at the same level to people still employed, instead of reducing wages and letting UBI fill in the rest. Some corporations already underpay their workers, then encourage the workers to apply for food stamps and other public supports to make up for the reduced wage.
The point of the paper is the importance of paid employment to a person's sense of well being. I agree with the paper.jsn , November 21, 2017 at 11:28 am
For the vast majority, a UBI would be income-neutral – it would have to be, to avoid massive inflation. So people would receive a UBI, but pay more tax to compensate. The effect on prices would be zero.
The advantage of a UBI is mostly felt at the lower end, where insecure/seasonal work does now pay. At the moment, a person who went from farm labourer to Christmas work to summer resort work in the UK would certainly be working hard, but also relentlessly hounded by the DWP over universal credit. A UBI would make this sort of lifestyle possible.Lambert Strether , November 22, 2017 at 1:44 am
Davidab, Good for you, but your perspicacity is not scalable. People are social animals and your attitude toward "the herd", at least as expressed here, is that of a predator, even if your taste doesn't run toward predation. Social solutions will necessarily be scalable or they won't be solutions for long.BJ , November 21, 2017 at 6:37 am
> the organized herd a herd animal trapped in the herd
I don't think throwing 80% to 90% of the population into the "prey" bucket is especially perspicacious politically (except, of course, for predators or parasites). I also don't think it's especially perspicacious morally. You write:
Not very practical advice for most, I realize, trapped in the herd as they are in car payments and mortgages, but perhaps aspirational?
Let me translate that: "Trapped in the herd as many are to support spouses and children." In other words, taking the cares of the world on themselves in order to care for others.divadab , November 21, 2017 at 7:41 am
Unemployed stay at home dad here. My children are now old enough to no longer need a stay at home dad. Things I have done: picked up two musical instruments and last year dug a natural swimming pond by hand. Further, one would need to refute all the increased happiness in retirement (NBER). Why social security but not UBI? I get being part of the precariat is painful and this is a reality for most the unemployed no matter where you live in the world. A UBI is unworkable because it will never be large enough to make people's lives unprecarious. Having said that, I am almost positive if you gave every unemployed person 24 k a year and health benefits, there would be a mass of non working happy creative folks.ambrit , November 21, 2017 at 8:34 am
UBI seems to me to encourage non-virtuous behavior – sloth, irresponsibility, fecklessness, and spendthriftness. I like the Finnish model – unemployment insurance is not limited – except if you refuse work provided by the local job center. Lots of work is not being done all over America – we could guarantee honest work to all with some imagination. Start with not spraying roundup and rather using human labor to control weeds and invasive species.
I do agree that universal health insurance is necessary and sadly Obamacare is not that.a different chris , November 21, 2017 at 9:19 am
The crux of this problem is the definition used for "non-virtuous behaviour." A new CCC is a good place to start though. (Your Tax Dollars At Work! [For some definition of tax dollars.]) As for BJ above, I would suppose that child rearing was his "employment" for years. good so far, but his follow-up is untypical. The 'Empty Nester' mother is a well known meme.BJ , November 21, 2017 at 11:18 am
Spendthriftness on 24K a year? Seriously? If we are disgorging unprofessional opinions, I will add my own: sloth and irresponsibility are more signs of depression rather than freedom from having to work. In fact, I believe (and I think much of the stuff here) supports the idea that people want to be seen as useful in some way. Doesn't include me! :) .. unfortunately, I have the charmingly named "dependents" so there you have it.roadrider , November 21, 2017 at 9:23 am
I lived 6 years as a grad student on 24k a year and would say it was easy. Only thing I would have to had worried about was awful health insurance. A two household each with 24k would be even easier, especially if you could do it in a low cost area. So I am not sure what you mean by spendthrift. But again it will never happen, so we will be stuck with what we have or most likely an even more sinister system. I guess I am advocating for a JG with unlimited number of home makers per household.Jesper , November 21, 2017 at 10:55 am
except if you refuse work provided by the local job center
And who's to say that the local "job center" has work that would be appropriate for every person's specific talents and interests? This is no better than saying that you should be willing to go work for some minimum-wage retail job with unpredictable scheduling and other forms of employer abuses after you lose a high-paying job requiring special talents. I have to call bullshit on this model. I went through a two-year stretch if unemployment in no small part because the vast majority of the available jobs for my skill set were associated with the MIC, surveillance state or the parasitic FIRE sector. I was able to do this because I had saved up enough FY money and had no debts or family to support.
I can also attest to the negative aspects of unemployment that the post describes. Its all true and I can't really say that I'e recovered even now, 2.5 years after finding another suitable job.nonclassical , November 21, 2017 at 10:42 am
The job center in the neighbouring Sweden had the same function. Had is the important word. My guess is that the last time someone lost their unemployment insurance payout due to not accepting a job was in the early 1980s. Prior to that companies might, maybe, possibly have considered hiring someone assigned to them – full employment forced companies to accept what was offered. Companies did not like the situation and the situation has since changed.
Now, when full employment is a thing of the past, the way to lose unemployment insurance payouts is by not applying to enough jobs. An easily gamed system by people not wanting to work: just apply to completely unsuitable positions and the number of applications will be high. Many companies are therefore overwhelmed by applications and are therefore often forced to hire more people in HR to filter out the unsuitable candidates.
People in HR tend not to know much about qualifications and or personalities for the job so they tend to filter out too many. We're all familiar with the skills-shortage .
Next step of this is that the companies who do want to hire have to use recruitment agencies. Basically outsourcing the HR to another company whose people are working on commission. Recruiters sometimes know how to find 'talent', often they are the same kind of people with the same skills and backgrounds as people working in HR.
To even get to the hiring manager a candidate has to go through two almost identical and often meaningless interviews. Recruiter and then HR. Good for the GDP I suppose, not sure if it is good for anything else.
But back on topic again, there is a second way of losing unemployment insurance payout: Time. Once the period covered has passed there is no more payouts of insurance. After that it it is time to live on savings, then sell all assets, and then once that is done finally go to the welfare office and prove that savings are gone and all assets are sold and maybe welfare might be paid out. People on welfare in Sweden are poor and the indignities they are being put through are many. Forget about hobbies and forget about volunteering as the money for either of those activities simply aren't available. Am I surprised by a report saying unemployed in Sweden are unhappy? Nope.Jeremy Grimm , November 21, 2017 at 1:53 pm
meanwhile NYTimes testimonials Friday, show average family of 4 healthprofit costs (tripled, due to trump demise ACA) to be $30,000. per year, with around $10,000. deductible end of any semblance of affordable access, "murKa"
https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiums-middle-class.htmlBill Smith , November 21, 2017 at 8:01 am
What do you mean by virtuous behavior?
Where does a character like Bertie Wooster in "Jeeves" fit in your notions of virtuous behavior? Would you consider him more virtuous working in the management of a firm, controlling the lives and labor of others -- and humorously helped by his his brilliant valet, Jeeves, getting him out of trouble?
For contrast -- in class and social status -- take a beer-soaked trailer trash gentleman of leisure -- and for sake of argument blessed with less than average intelligence -- where would you put him to work where you'd feel pleased with his product or his service? Would you feel better about this fellow enjoying a six-pack after working 8 hours a day 5 days a week virtuously digging and then filling a hole in the ground while carefully watched and goaded by an overseer? [Actually -- how different is that from "using human labor to control weeds and invasive species"? I take it you're a fan of chain-gangs and making the poor pick up trash on the highways?]
What about some of our engineers and scientists virtuously serving the MIC? Is their behavior virtuous because they're not guilty of sloth, irresponsibility [in executing their work], fecklessness, and spendthriftness? On this last quality how do you feel about our government who pay the salaries for all these jobs building better ways to kill and maim?BJ , November 21, 2017 at 11:07 am
How big is the swimming pool and how long did it take? Where did you put the dirt?tegnost , November 21, 2017 at 9:32 am
It is a design by David Pagan Butler. It is his plunge pool design, deepend is 14 by 8 by 7 deep. I used the dirt to make swales around some trees. Win win all around.BJ , November 21, 2017 at 11:25 am
curious to know whether you are married to someone with a job?David Kane Miller , November 21, 2017 at 6:55 am
The answer is yes my spouse works. So I do have a schedule of waking up to make her lunch everyday, meeting her at lunch to walk, and making dinner when she gets home, but we do all those things on her days off so .
But again we would need to explain away, why people who are retired are happier? Just because they think they payed into social security? Try explaining to someone on the SS dole how the government spends money into existence and is not paid by taxes or that the government never saved their tax money, so there are not entitled to this money.a different chris , November 21, 2017 at 9:23 am
I hated working for other people and doing what they wanted. I began to feel some happiness when I had a half acre on which I could create my own projects. Things improved even more when I could assure myself of some small guaranteed income by claiming Social Security at age 62. To arise in the morning when I feel rested, with interesting projects like gardens, fences, small buildings ahead and work at my own pace is the essence of delight for me. I've been following your arguments against UBI for years and disagree vehemently.Mel , November 21, 2017 at 9:42 am
I feel I would behave the same as you, if I had the chance. *But* no statements about human beings are absolute, and because UBI would work for either of us does not mean it would work for the majority. Nothing devised by man is perfect.tegnost , November 21, 2017 at 9:37 am
It's not you; it's not me. It's those deplorable people.Lambert Strether , November 22, 2017 at 1:56 am
first you had to buy the half acre in a suitable location, then you had to work many years to qualify for social security, the availability of which you paid for and feel you deserve. You also have to buy stuff for fences gardens and small buildings. At most that rhymes with a ubi but is significantly different in it's make up.Carla , November 21, 2017 at 7:16 am
> when I
hada half acre on which I could create my own projects
That is, when you acquired the half acre, which not everyone can do. It seems to me there's a good deal of projecting going on with this thread from people who are, in essence, statistical outliers. But Mitchell summarizes the literature:
So for decades, researchers in this area, as opposed to bloggers who wax lyrical on their own opinions, have known that the importance of work in our lives goes well beyond the income we earn.
If the solution that works for you is going to scale, that implies that millions more will have to own land. If UBI depends on that, how does that happen? (Of course, in a post-collapse scenario, the land might be taken , but that same scenario makes the existence of institutions required to convey the UBI highly unlikely. )Andrew , November 21, 2017 at 7:25 am
Very glad to hear that Bill Mitchell is working on the "Future of Work" book, and to have this post, and the links to the other segments. Thank you, Yves!I_Agree , November 21, 2017 at 11:26 am
I don't agree with this statement. Never will. I'm the complete opposite. Give me more leisure time and you'll find me painting, writing, playing instruments and doing things that I enjoy. I recall back to when I was a student, I relished in the free time I got (believe me University gave me a lot of free time) between lectures, meaning I could enjoy this time pursuing creative activities. Sure I might be different than most people but I know countless people who are the same.
My own opinion is that root problem lies in the pathology of the working mentality, that 'work' and having a 'job' is so engrained into our society and mindset that once you give most people the time to enjoy other things, they simply can't. They don't know what to do with themselves and they eventually become unhappy, watching daytime TV sat on the sofa.
I recall back to a conversation with my mother about my father, she said to me, 'I don't know how your father is going to cope once he retires and has nothing to do' and it's that very example of where work for so many people becomes so engrained in their mindset, that they are almost scared of having 'nothing to do' as they say. It's a shame, it's this systemic working mentality that has led to this mindset. I'm glad I'm the opposite of this and proud by mother brought me up to be this way. Work, and job are not in my vocabulary. I work to live, not live to work.nycTerrierist , November 21, 2017 at 12:18 pm
I agree with Andrew. I think this data on the negative effects says more about how being employed fundamentally breaks the human psyche and turns them into chattel, incapable of thinking for themselves and destroying their natural creativity. The more a human is molded into a "good worker" the less they become a full fledged human being. The happiest people are those that have never placed importance on work, that have always lived by the maxim "work to live, not live to work". From my own experience every assertion in this article is the opposite of reality. It is working that makes me apathethic, uncreative, and miserable. The constant knowing that you're wasting your life, day after day, engaged in an activity merely to build revenue streams for the rich, instead of doing things that help society or that please you on a personal level, is what I find misery inducing.jrs , November 21, 2017 at 12:48 pm
I agree. If financial insecurity is removed from the equation -- free time can be used creatively for self-actualization, whatever form that may take: cultivating the arts, hobbies, community activities, worthy causes and projects. The ideology wafting from Mitchell's post smells to me like a rationale for wage slavery (market driven living, neo-liberalism, etc.)FelicityT , November 21, 2017 at 3:18 pm
Besides how are people supposed to spend their time "exploring other opportunities" when unemployed anyway? To collect unemployment which isn't exactly paying that much anyway, they have to show they are applying to jobs. To go to the movies the example given costs money, which one may tend to be short on when unemployed. They probably are looking for work regardless (for the income). There may still be some free time. But they could go back to school? Uh in case one just woke up from a rock they were under for 100 years, that costs money, which one may tend to be short on when unemployed, plus there is no guarantee the new career will pan out either, no guarantee someone is just chomping at the bit to hire a newly trained 50 year old or something. I have always taken classes when unemployed, and paid for it and it's not cheap.
Yes to use one's time wisely in unemployment in the existing system requires a kind of deep psychological maturity that few have, a kind of Surrender To Fate, to the uncertainty of whether one will have an income again or not (either that or a sugar daddy or a trust fund). Because it's not easy to deal with that uncertainty. And uncertainty is the name of the game in unemployment, that and not having an income may be the pain in it's entirety.Yves Smith Post author , November 21, 2017 at 5:21 pm
Sadly this breaking down into a "good worker" begins for most shortly after they begin school. This type of education harms society in a myriad of ways including instilling a dislike of learning, deference to authority (no matter how irrational and unjust), and a destruction of a child's natural curiosity.Yves Smith Post author , November 21, 2017 at 4:29 pm
I don't buy your premise that people are "creative". The overwhelming majority do not have creative projects they'd be pursuing if they had leisure and income. Go look at retirees, ones that have just retired, are healthy, and have money.Summer , November 21, 2017 at 6:25 pm
You are really misconstruing what the studies have found and misapplied it to your situation. Leisure time when you have a job or a role (being a student) is not at all the same as having time when you are unemployed, with or without a social safety net.jrs , November 21, 2017 at 6:37 pm
- Work: that can be me hiring someone to cut my yard, or another type of one-off thing filled with precariousness.
- Job: that less temporary work, but by no means permanent. Just a step up from the precariousness of work.
- Career: that is work in the same field over a long period of time and it is more likely that someone will develop an identity through performing the work. Still precarious, but maybe more fulfilling.
- Sense of purpose: I was always under the impression that is something you have to give yourself. If it can be taken away by someone what was the purpose?Lambert Strether , November 22, 2017 at 2:00 am
one often has a role when unemployed: finding work. But it's not a very fulfilling one! But if one is trying to find work, it's not exactly the absence of a role either even if it still leaves significantly more free time than otherwise, maybe winning the lottery is the absence of a role.
But then it's also not like we give people a UBI even for a few years (at any time in adult life) to get an education. Only if they take out a student loan approaching the size of a mortgage or have parents willing to pony up are they allowed that (to pay not just for the education but to live because having a roof over one's head etc. is never free, a UBI via debt it might be called).Jesper , November 21, 2017 at 7:47 am
> Give me more leisure time and you'll find me painting, writing, playing instruments and doing things that I enjoy.
Nothing to breed resentment of "the creative class" here! Blowback from Speenhamland brought on the workhouses, so be careful what you wish for.diptherio , November 21, 2017 at 10:00 am
Again the UBI vs JG debate .
UBI won't happen and JG has been tried (and failed).
The argument that JG would allow the public sector to hire more people is demeaning to people already employed in the public sector and demonstrably false – people are hired into the public sector without there being a JG. It is most certainly possible to be against a JG while wanting more people working in the public sector.
The way forward is to have a government acting for people instead of for corporations. Increase the amount of paid vacations, reduce the pension age and stop with the Soviet style worship of work: While some people are apparently proud of their friends and relatives who died while at work it is also possible to feel sad about that.Jesper , November 21, 2017 at 10:27 am
JG has been tried (and failed).
When and where? The NCCC seemed to work pretty good here in the Western US.Yves Smith Post author , November 21, 2017 at 4:39 pm
The JG was tried in Communist countries in Europe, Asia and Americas. The arguments then and there were the same as here and now, made by the same type of social 'scientists' (economists).
Would a JG be different here and now as the Republicans and Democrats are representing the best interests of the people? Or are they representing the same kind of interests as the Communist parties did?tegnost , November 21, 2017 at 10:00 am
Data, please. The USSR fell because it was spending on its military to keep up with the US, a much larger economy. Countering your assertion we have this:tegnost , November 21, 2017 at 10:15 am
As long as people argue that "it's not fair" to fix the inequality issue and employ things like debt jubilee or student loan forgiveness, or if we fix the ridiculous cost of health care what will all those insurance agents do then we will wind up with the real kind of class warfare, rather than the current punching from the top down, the punching will come from the bottom, because the situation is not fair now, it's just TINA according to those who profit from it. In my own life there is a balance of creativity and work, and I find work enables my creativity by putting some pressure on my time, i.e., I get up earlier, I practice at 8:30 am instead of sleeping til 10 and winding up with S.A..D., I go to bed rather than watch tv or drink to excess.. in other words i have some kind of weird schedule, I have days off sort of When I've been unemployed I feel the way s described in the article. I find the arguments in favor of ubi tend to come from people who already have assets, or jobs, or family who they take care of which is actually a job although uncommonly described as such. The only truth I see in real life is that the unemployed I am intimately familiar with first are mentally oppressed by the notion that to repair their situation will require they work every waking hour at substandard wages for the rest of their life and that is a major barrier to getting started, and that is a policy choice the gov't and elite classes purposefully made which created the precariat and will be their undoing if they are unable to see this.j84ustin , November 21, 2017 at 10:08 am
Hey look, even the msm is looking at it
https://www.seattletimes.com/seattle-news/is-uprising-the-only-way-out-of-gross-inequality-maybe-so/hunkerdown , November 21, 2017 at 7:53 am
As someone who works in the public sector I never quite thought of it like that, thanks.nonclassical , November 21, 2017 at 10:45 am
Disappointing that there's no analysis in this context of less employment, as in shorter work weeks and/or days, as opposed to merely all or none.Vatch , November 21, 2017 at 11:31 am
see – hear
(but no possibility without healthcare access, rather than healthtprofit)jrs , November 21, 2017 at 1:04 pm
Interesting point. I read a science fiction story in which the protagonist arrives for work at his full time job at 10:00 AM, and he's finished for the day at 4:00 PM. I can't remember the name of the story or novel, unfortunately.Lambert Strether , November 22, 2017 at 2:02 am
Agreed. And they already have it in places like Denmark. Why don't we talk about that? It actually exists unlike utopian schemes for either total UBI or total work guarantee (government job creation is not utopian, but imagining it will employ everyone is, and I would like the UBI to be more widely tried, but in this country we are nowhere close). Funny how utopia becomes more interesting to people than actual existing arrangements, even though of course those could be improved on too.
The Danish work arrangement is less than a 40 hour week, and mothers especially often work part-time but both sexes can. It's here in this country where work is either impossibly grueling or you are not working. No other choice. In countries with more flexible work arrangements more women actually work, but it's flexible and flexible for men who choose to do the parenting as well. I'm not saying this should be for parents only of course.Otis B Driftwood , November 21, 2017 at 7:58 am
Because the JG sets the baseline for employment, which private companies must meet, the JG (unlike the UBI) can do this.ambrit , November 21, 2017 at 8:38 am
My own situation is that I am unhappy in my well-paying job and would like nothing more than to devote myself to other interests. I'm thirty years on in a relationship with someone who grew up in bad financial circumstances and panics whenever I talk about leaving my job. I tell her that we have 2 years of living expenses in the bank but I can't guarantee making the same amount of money if I do leave my job. She has a job that she loves and is important and pays barely 1/2 of my own income. So she worries about her future with me. She worries about losing her home. I suppose that makes me the definition of a wage slave. And it makes for an increasingly unhappy marriage. I admire those who have faced similar circumstances and found a way through this. Sorry to vent, but this topic and the comments hit a nerve with me and I'm still trying to figure this out.jrs , November 21, 2017 at 1:11 pm
Otis; We are presently going through a period where that "two year cushion" has evaporated, for various reasons. We are seeing our way through this, straight into penury and privation. Take nothing for granted in todays' economy.bronco , November 21, 2017 at 12:47 pm
yes find the lower paying job that you like more first. If you just quit for nothing in the hopes of finding one it might not happen. Of course unemployment also happens sometimes, whether we want it or not.Lambert Strether , November 22, 2017 at 2:03 am
The newer generations are worse when it comes to lifestyle. Those of that are older can at least remember a time without cellphones internet streaming services leasing a new car every 2 years etc.
What about the young? My niece and her husband should be all set , his mom sunk money into a home on the condition she moved into a mother in law apartment. So far so good right? 2 years in they are imploding even with the free child care she provides. Combined their wireless bill a month is over $300. The sit on the couch side by side and stream netflix shows to dueling iphones in front of a 65 inch tv that is not even turned on. Wearing headphones in silence.
Both driving new vehicles , both have gym memberships they don't use . They buy lattes 3 or 4 times a day which is probably another 500 a month.
My uncle passed away recently and my niece asked if she was in the will. It was literally her only communication on the subject. They are going under and could easily trim a few thousand a month from the budget but simply won't. No one in the family is going to lift a finger for them at this point they burned every possible bridge already. I have seen people living in cars plenty lately but I think these will be the first I see to living in brand new cars .
Somewhere along the line they got the impression that the american dream was a leased car a starbucks in one hand and an iphone in the other .
Confront them with the concept of living within a paycheck and they react like a patient hearing he has 3 months to live.JBird , November 22, 2017 at 3:00 am
Ah. Reagan's "welfare queens" updated. Kids these days!Thuto , November 21, 2017 at 8:00 am
Yeah being poor, never mind growing up poor, just well and truly sucks and it can really @@@@ you up. Gives people all sorts of issues. I'm rather like her, but I have had the joy of multi-hour commutes to unexciting soul crushing work. Happy, happy, joy, joy! However don't forget that with the current political economy things are likely to go bad in all sorts of ways. This whole site is devoted to that. My suggestion is to keep the job unless you have something lined up. Not being able to rent has it own stresses too. Take my word for it.TroyMcClure , November 21, 2017 at 9:19 am
I may be engaging in semantics but I think conflating work and jobs makes this article a bit of a mixed bag. I know plenty of people who are terribly unhappy in their jobs, but nonetheless extract a sense of wellbeing from having a stable source of INCOME to pay their bills (anecdotally speaking, acute stress from recent job losses is closely linked to uncertainty about how bills are going to be paid, that's why those with a safety net of accumulated savings report less stress than those without). Loss of status, social standing and identity and the chronic stress borne from these become evident much later I.e. when the unemployment is prolonged, accompanied of course by the still unresolved top-of-mind concern of "how to pay the bills".
As such, acute stress for the recently unemployed is driven by financial/income uncertainty (I.e. how am I going to pay the bills) whereas chronic stress from prolonged unemployment brings into play the more identity driven aspects like loss of social standing and status. For policy interventions to have any effects, policy makers would have to delineate the primary drivers of stress (or lack of wellbeing as the author calls it) during the various phases of the unemployment lifecycle. An Unemployment Insurance Fund (UIF) like we have here in South Africa appears to address the early stages of unemployment, and the accompanying acute stress, quite well by providing the income guarantee (for six months) that cushions the shock of losing a job. What's still missing of course are interventions that promote the quick return to employment for those on UIF, so maybe a middle of the road solution between UBI and a jobs guarantee scheme is how policy makers should be framing this, instead of the binary either/or we currently have.Thuto , November 21, 2017 at 10:06 am
Lots' of people think they're unhappy with their jobs. Let them sit unemployed for 9 months and ask them if they want that job back. The usual parade of anecdata is on display here in the comments. Mitchell's real data and analysis in the article above still stand.jrs , November 21, 2017 at 1:15 pm
If you'd read through my comment, and not rushed through it with a view of dishing out a flippant response, you'd have seen that nowhere do I question the validity of his data, I merely question how the argument is presented in some areas (NC discourages unquestioning deference to the views of experts no??). By the way, anecdotes do add to richer understanding of a nuanced and layered topic (as this one is) so your dismissal of them in your haste to invalidate people's observations is hardly helpful.Lambert Strether , November 22, 2017 at 2:04 am
Yes people many not like their jobs but prefer the security of having them to not. Yes even if the boss sexually harasses one (as we are seeing is very common). Yes even if there is other workplace abuse. Yes even when it causes depression or PTSD (but if one stays with such a job long term it ruins the self confidence that is one prerequisite to get another job!). Yes even if one is in therapy because of job stress, sexual harassment or you name it. The job allows the having health insurance, allows the therapy, allows the complaining about the job in therapy to make it through another week.Democrita , November 21, 2017 at 8:13 am
> The usual parade of anecdata is on display here in the comments. Mitchell's real data and analysis in the article above still stand.
Ding ding ding!jrs , November 21, 2017 at 1:40 pm
When unemployed, the stress of worry about money may suppress the creative juices. Speaking from experience. People may well 'keep looking for jobs' because they know ultimately they need a job with steady income. The great experience of some freelancers notwithstanding, not all are cut out for it.
I would love to see some more about happiness or its lack in retirement–referenced by stay-at-home dad BJ , above.
I wonder, too, about the impact of *how* one loses one's job. Getting laid off vs fired vs quitting vs involuntary retirement vs voluntary, etc feel very different. Speaking from experience on that, too. I will search on these points and post anything of interest.freedeomny , November 21, 2017 at 10:23 am
There are also other things that are degrading about the very process of being unemployed not mentioned here. What about the constant rejection that it can entail? One is unemployed and looking for work, one sends out resumes, many of them will never be answered, that's rejection. Then if one is lucky they get interviews, many will never lead to jobs, yet more rejection. Does the process of constant rejection itself have a negative effect on a human being whether it's looking for jobs or dates or whatever? Isn't it learned helplessness to if one keeps trying for something and keeps failing. Isn't that itself demoralizing entirely independent of any doubtful innate demoralizing quality of leisure.Yves Smith Post author , November 21, 2017 at 5:15 pm
I am not so sure if I agree with this article. I think it really depends on whether or not you have income to support yourself, hate or love your job, and the amount of outside interests you have, among other things. Almost everyone I know who lives in the NYC area and commutes into the city .doesn't like their job and finds the whole situation "soul-crushing".
Those that live in Manhattan proper are (feel) a bit better off. I for one stopped working somewhat voluntarily last year. I write somewhat because I began to dislike my job so much that it was interfering with my state of well being, however, if I had been allowed to work remotely I probably would have stuck it out for another couple of years.
I am close enough to 62 that I can make do before SS kicks in although I have completely changed my lifestyle – i.e. I've given up a materialistic lifestyle and live very frugally.
Additionally I saved for many years once I decided to embark on this path. I do not find myself depressed at all and the path this year has been very enriching and exciting (and scary) as I reflect on what I want for the future. I'm pretty sure I will end up moving and buying a property so that I can become as self sufficient as possible. Also, I probably will get a job down the line – but if I can't get one because I am deemed too old that will be ok as well. The biggest unknown for me is how much health insurance will cost in the future .JBird , November 22, 2017 at 3:30 am
The article made clear that the studies included "unemployed but with income" from government support. It is amazing the degree to which readers ignore that and want to make the findings about "unemployed with no income".Jamie , November 21, 2017 at 10:43 am
That's because we Americans all have work=good=worthy=blessed by God while workless=scum=worthless=accursed by God engraved into our collective soul. Our politics, our beliefs, are just overlays to that.
Even when we agree that the whole situation just crushes people into paste, and for which they have no defense regardless of how hard they work, how carefully they plan, or what they do, that underlay makes use feel that this is their/our fault. Any suggestions that at least some support can be decoupled from work, and that maybe work, and how much you earn, should not determine their value, brings the atavistic fear of being the "undeserving poor," parasites and therefore reprobated scum.
So we don't hear what you are saying without extra effort because it's bypassing our conscious thoughts.Left in Wisconsin , November 21, 2017 at 12:02 pm
Add my voice to those above who feel that forced labor is the bane of existence, not the wellspring. All this study says to me is that refusing to employ someone in capitalist society does not make them happy. It makes them outcasts.
So, I say yes to a JG, because anyone who wants work should be offered work. But at the same time, a proper JG is not forced labor. And the only way to ensure that it is not forced labor, is to decouple basic needs from wage slavery.jrs , November 21, 2017 at 1:31 pm
I am critical of those who distinguish between the job and the income. Of course the income is critical to the dignity of the job. For many jobs, it is the primary source of that dignity. The notion that all jobs should provide some intrinsic dignity unrelated to the income, or that people whose dignity is primarily based on the income they earn rather than the work they do are deluded, is to buy in to the propaganda of "passion" being a requirement for your work and to really be blind to what is required to make a society function. Someone has to change the diapers, and wipe the butts of old people. (yes, I've done both.) It doesn't require passion and any sense of satisfaction is gone by about the second day. But if you could make a middle class living doing it, there would be a lot fewer unhappy people in the world.
It is well known that auto factory jobs were not perceived as good jobs until the UAW was able to make them middle class jobs. The nature of the actual work itself hasn't changed all that much over the years – mostly it is still very repetitive work that requires little specialized training, even if the machine technology is much improved. Indeed, I would guess that more intrinsic satisfaction came from bashing metal than pushing buttons on a CNC machine, and so the jobs may even be less self-actualizing than they used to be.
The capitalist myth is that the private sector economy generates all the wealth and the public sector is a claim on that wealth. Yet human development proves to us that this is not true – a substantial portion of "human capital" is developed outside the paid economy, government investment in R&D generates productivity growth, etc. And MMT demonstrates that we do not require private sector savings to fund public investment.
We are still a ways from having the math to demonstrate that government investment in caring and nurturing is always socially productive – first we need productivity numbers that reflect more than just private sector "product." But I think we are moving in that direction. Rather than prioritize a minimum wage JG of make-work, we should first simply pay people good wages to raise their own children or look after their elderly and disabled relatives. The MMT JG, as I understand it, would still require people to leave their kids with others to look after them in order to perform some minimum wage task. That is just dumb.Whiskey Bob , November 21, 2017 at 1:34 pm
Maybe it's dumb, it's certainly dumb in a system like the U.S. where work is brutal and often low paid and paid childcare is not well remunerated either. But caretakers also working seems to work in countries with greater income equality, good job protections, flexible work arrangements, and a decent amount of paid parental leave – yea Denmark, they think their children should be raised by professionals, but also work-life balance is still pretty good.redleg , November 21, 2017 at 2:28 pm
My take is that capitalism has made the benefits and malus of having a job so ingrained into culture and so reinforced. Having a job is so closely linked to happiness because it gives you the money needed to pursue it.
A job affords you the ability to pursue whatever goals you want within a capitalist framework. "Everything" costs money and so having a job gives you the money to pay for those costs and go on to fulfill your pursuit of happiness.
Analyzing whether people are happy or not under these conditions seem apparent that it is going to lead to results heavily biased towards finding happiness through employment.
The unemployed are often living off someone else's income and feel like an undeserving parasite. Adults are generally ingrained with the culture that they have to grow up and be independent and be able to provide for a new family that they will start up. Becoming unemployed is like being emasculated and infantile, the opposite of what is expected of adults.
There's also that not having a job is increasingly being punished especially in the case of America. American wages have stayed either largely static or have worsened, making being unemployed that much more of a burden on family or friends. Unemployment has been demonized by Reaganism and has become systematically punishable for the long term unemployed. If you are unemployed for too long, you start losing government support. This compounds the frantic rush to get out of unemployment once unemployed.
There is little luxury to enjoy while unemployed. Life while unemployed is a frustrating and often disappointing hell of constant job applications and having many of them lead to nothing. The people providing support often start to become less so over time and become more convinced of laziness or some kind of lack of character or willpower or education or ability or whatever. Any sense of systemic failure is transplanted into a sense of personal failure, especially under neoliberalism.
I am not so sure about the case of Europe and otherwise. I am sure that the third world often has little or no social safety nets so having work (in exploitative conditions in many cases) is a must for survival.
Anyways, I wonder about the exact methodologies of these studies and I think they often take the current feelings about unemployment and then attempt to extrapolate talking points for UBI/JG from them. Yes, UBI wouldn't change culture overnight and it would take a very, very long time for people to let down their guard and adjust if UBI is to be implemented in a manner that would warrant trust. This article seems to understand the potential for that, but decides against it being a significant factor due to the studies emphasizing the malus of unemployment.
I wonder how different the results would be if there were studies that asked people how they would feel if they were unemployed under a UBI system versus the current system. I know a good number of young people (mostly under 30) who would love to drop out and just play video games all day. Though the significance of such a drastic demographic shift would probably lead to great political consequences. It would probably prove the anti-UBI crowd right in that under a capitalist framework, the capitalists and the employed wouldn't tolerate the unemployed and would seek to turn them into an underclass.
Personally I think a combination of UBI and JG should be pursued. JG would work better within the current capitalist framework. I don't think it is without its pitfalls due to similar possible issues (with the similar policy of full employment) either under Keynesianism (e.g. Milton Friedman sees it as inefficient) or in the USSR (e.g. bullshit jobs). There is the possibility of UBI having benefits (not having the unemployed be a burden but a subsidized contributer to the economy) so I personally don't think it should be fully disregarded until it is understood better. I would like it if there were better scientific studies to expand upon the implications of UBI and better measure if it would work or not. The upcoming studies testing an actual UBI system should help to end the debates once and for all.ChrisPacific , November 21, 2017 at 5:30 pm
My $0.02: I have a creative pursuit (no money) and a engineering/physical science technical career (income!). I am proficient in and passionate about both. Over the last few years, the technical career became tenuous due to consolidation of regional consulting firms (endemic to this era)- wages flat to declining, higher work stress, less time off, conversation to contact employment, etc.- which has resulted in two layoffs.
During the time of tenuous employment, my art took on a darker tone. During unemployment the art stopped altogether.
I'm recently re-employed in a field that I'm not proficient. Both the peter principle and imposter syndrome apply. My art has resumed, but the topics are singular about despair and work, to the point that I feel like I'm constantly reworking the same one piece over and over again. And the quality has plummeted too.
In some fields (e.g. engineering), being a wage slave is the only realistic option due to the dominance of a small number of large firms. The big players crowd out independents and free lancers, while pressuring their own employees through just-high-enough wages and limiting time off. Engineering services is a relationship- based field, and the big boys (and they are nearly all boys) have vastly bigger networks to draw work from than a small firm unless that small firm has a big contact to feed them work (until they get gobbled up). The big firms also have more areas of expertise which limits how useful a boutique firm is to a client pool, except under very narrow circumstances. And if you are an introvert like most engineering people, there's no way to compete with big firms and their marketing staff to expand a network enough to compete.
In that way, consulting is a lot like art. To make a living at it you need either contacts or a sponsor. Or an inheritance.nihil obstet , November 21, 2017 at 6:07 pm
I would be interested to know what the definition of unemployment was for the purpose of this study (I couldn't find it in the supplied links). If it's simply "people who don't have a job," for example, then it would include the likes of the idle rich, retirees, wards of the state, and so on. Binary statements like this one do make it sound like the broad definition is the one in use:
When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed.
The conclusion seems at odds with results I've seen for some of those groups – for example, I thought it was fairly well accepted that retirees who are supported by a government plan that is sufficient for them to live on were generally at least as happy as they had been during their working life.
If, on the other hand, the study uses a narrow definition (e.g. people who are of working age, want a job or need one to support themselves financially, but can't find one) then the conclusion seems a lot more reasonable. But that's a heavily loaded definition in economic and cultural terms. In that case, the conclusion (people are happier if they have a job) only holds true in the current prevailing model of society. It doesn't rule out the possibility of structuring society or the economy differently in such a way that people can be non-working and happy. The existence of one such population already (retirees) strongly suggests that outcomes like this are possible. A UBI would be an example of just such a restructuring of society, and therefore I don't think that this study and its result are necessarily a valid argument against it.Summer , November 21, 2017 at 6:52 pm
Which makes a person happier -- being considered worthless by one's society or valuable? How many studies do we need to answer that question? Apparently, a lot, because studies like this one keep on going. The underlying assumption is that jobs make one valuable. So if you don't have a job you're worthless. Now, who's happier on the whole, people with jobs or the unemployed? That's surely good for a few more studies. Did you know that members of socially devalued groups (minorities, non-heteros, and the like) have higher rates of dysfunction, rather like the unemployed? Hmm, I wonder if there's maybe a similar principle at work. And my solution is not to turn all the people of color white nor to change all the women to men nor to "cure" gays. Well, maybe a few more conclusive studies of this kind will convince me that we must all be the same, toeing the line for those whom it has pleased God to dictate our values to us.
I am convinced that we shouldn't outlaw jobs, because I believe the tons of stories about happy people in their jobs However, I also believe we shouldn't force everyone into jobs, because I know tons of stories about happy people without jobs. You know, the stories that the JG people explain away: parents caring for their children (JG -- "oh, we'll make that a job!"), volunteers working on local planning issues (JG -- "oh, we'll make that a job, too. In fact, we'll make everything worth doing a job. The important thing is to be able to force people to work schedules and bosses, because otherwise, they'll all lie around doing nothing and be miserable"), the retired (JG -- "that's not really the same, but they'd be better off staying in a job"). And this is all before we get to those who can't really hold a job because of disability or geography or other responsibilities.
I support the JG over the current situation, but as to what we should be working for, the more I read the JG arguments, the more paternalistic and just plain narrow minded judgmental they seem.Lambert Strether , November 22, 2017 at 1:24 am
If someone else gives you a sense of purpose and takes it away what was the purpose?
Data like that provided by Mitchell is important to demolishing the horrid "economic anxiety" frame much beloved by liberals, especially wonkish Democrats.* It's not (a) just feelings , to be solved by scented candles or training (the liberal version of rugged individualism) and (b) the effects are real and measurable. It's not surprising, when you think about it, that the working class is about work .
* To put this another way, anybody who has really suffered the crawling inwardness of anxiety, in the clinical sense, knows that it affects every aspect of one's being. Anxiety is not something deplorables deploy as cover for less than creditable motives.
Nov 22, 2017 | www.nakedcapitalism.com
I am late to write up a research paper that has not gotten the attention it warrants.
As most readers know, the 2005 bankruptcy law reform included provisions that made it virtually impossible to discharge student debt in bankruptcy. Yet borrowers who miss payments wind up paying penalty interest rates, with the result that they will carry their student debt with them to the grave.
But why do student borrowers get such harsh treatment? The justification for the bankruptcy law change was that student borrowers were prone to abusing the bankruptcy code even though they had the ability to make good on their loans. I've never bought the "strategic default" meme, which is almost entirely creditor urban legend to justify squeezing more blood from the stone of broke borrowers. Bankruptcy is a painful process that leaves your credit record damaged for years. And why should anyone think that student loans were more prone to abuse? If someone declared a Chapter 7 bankruptcy pre-2005, the court would take all the assets it could lay its hands on, allocate the proceeds among the various debts, and wipe out the rest. It's not as if student loans were treated worse than any other non-collateralized loans.
Nevertheless, the argument was that student borrowers were defaulting opportunistically. If true, that higher default level would lead lenders to charge higher interest rates to cover for the cost of abusive defaults.
The prototypical strategic defaulter would be someone with few assets but high actual or expected income.
In a new Philadelphia Fed working paper, Rajeev Darolia and Dubravka Ritter constructed a database of private student loan (PSL) borrowers to see if their behavior changed as a result of the bankruptcy law reforms. We've embedded their article at the end of the post. Their conclusion:
Our findings contribute to this debate by providing evidence on bankruptcy filing and default behavior using a unique sample of anonymized credit bureau records. Although the 2005 bankruptcy reform reduced rates of Chapter 7 bankruptcy overall, the provisions making PSL debt nondischargeable do not appear to have reduced the bankruptcy filing or default behavior of PSL borrowers relative to other types of student loan borrowers at meaningful levels. Therefore, our analysis does not reveal debtor responses to the 2005 bankruptcy reform that would indicate widespread opportunistic behavior by PSL borrowers before the policy change. We interpret these findings as a lack of evidence that the moral hazard associated with PSL dischargeability pre-BAPCPA appreciably affected the behavior of student loan borrowers.
So why are default levels now so high? Lenders relaxed their standards and handed out more credit as a result of the 2005 bankruptcy reforms. And rising higher education costs means students are borrowing more than ever.
Anti-Schmoo , November 22, 2017 at 6:32 amArizona Slim , November 22, 2017 at 6:47 am
Having been a debt slave; I can understand what the children (they are children, not adults) are going through. They are financially ignorant; mere babes, being unmercifully exploited by the sophisticated (emphasis on Sophist) financialization culture extant across the western world; especially the U.S..
No loan should be allowed (for children) without a course in basic finance, debt, credit, and income realities. Now retired, debt free, and solvent; I know of what I speak. Critical thinking skills are at an all time low in the U.S.; a very serious societal problem; not soon solved
What about the time-worn argument in favor of all the extra money you're going to make because you went to (genuflects) college? A lot of people have gone deeply into debt because they've heard this one. And it's a lie.
Nov 10, 2017 | annbeaker.livejournal.com
http://bitecharge.com/play/advgram#q26 Congratulations, you are a grammar master! You have a superb understanding of even the trickiest grammar rules. Not only do you know the difference between affect and effect, but you also never confuse your tenses. You must be an English scholar because only 4% of Americans can get a perfect score on this test.
- September 27th, 2017 09:58 pm
Nov 05, 2017 | www.zerohedge.com
Authored by Matt Taibbi via RollingStone.com,
How universities, banks and the government turned student debt into America's next financial black hole...
On a wind-swept, frigid night in February 2009, a 37-year-old schoolteacher named Scott Nailor parked his rusted '92 Toyota Tercel in the parking lot of a Fireside Inn in Auburn, Maine. He picked this spot to have a final reckoning with himself. He was going to end his life.
Beaten down after more than a decade of struggle with student debt, after years of taking false doors and slipping into various puddles of bureaucratic quicksand, he was giving up the fight. "This is it, I'm done," he remembers thinking. "I sat there and just sort of felt like I'm going to take my life. I'm going to find a way to park this car in the garage, with it running or whatever."
Nailor's problems began at 19 years old, when he borrowed for tuition so that he could pursue a bachelor's degree at the University of Southern Maine. He graduated summa cum laude four years later and immediately got a job in his field, as an English teacher.
Bu t he graduated with $35,000 in debt, a big hill to climb on a part-time teacher's $18,000 salary. He struggled with payments, and he and his wife then consolidated their student debt, which soon totaled more than $50,000. They declared bankruptcy and defaulted on the loans. From there he found himself in a loan "rehabilitation" program that added to his overall balance. "That's when the noose began to tighten," he says.
The collectors called day and night, at work and at home. "In the middle of class too, while I was teaching," he says. He ended up in another rehabilitation program that put him on a road toward an essentially endless cycle of rising payments. Today, he pays $471 a month toward "rehabilitation," and, like countless other borrowers, he pays nothing at all toward his real debt, which he now calculates would cost more than $100,000 to extinguish. "Not one dollar of it goes to principal," says Nailor. "I will never be able to pay it off. My only hope to escape from this crushing debt is to die."
After repeated phone calls with lending agencies about his ever-rising interest payments, Nailor now believes things will only get worse with time. "At this rate, I may easily break $1 million in debt before I retire from teaching," he says.
Nailor had more than once reached the stage in his thoughts where he was thinking about how to physically pull off his suicide. "I'd been there before, that just was the worst of it," he says. "It scared me, bad."
He had a young son and a younger daughter, but Nailor had been so broken by the experience of financial failure that he managed to convince himself they would be better off without him. What saved him is that he called his wife to say goodbye. "I don't know why I called my wife. I'm glad I did," he says. "I just wanted her or someone to tell me to pick it up, keep fighting, it's going to be all right. And she did."
From that moment, Nailor managed to focus on his family. Still, the core problem – the spiraling debt that has taken over his life, as it has for millions of other Americans – remains.
Horror stories about student debt are nothing new. But this school year marks a considerable worsening of a tale that ought to have been a national emergency years ago. The government in charge of regulating this mess is now filled with predatory monsters who have extensive ties to the exploitative for-profit education industry – from Donald Trump himself to Education Secretary Betsy DeVos, who sets much of the federal loan policy, to Julian Schmoke, onetime dean of the infamous DeVry University, whom Trump appointed to police fraud in education.
Americans don't understand the student-loan crisis because they've been trained to view the issue in terms of a series of separate, unrelated problems.
They will read in one place that as of the summer of 2017, a record 8.5 million Americans are in default on their student debt, with about $1.3 trillion in loans still outstanding.
In another place, voters will read that the cost of higher education is skyrocketing, soaring in a seemingly market-defying arc that for nearly a decade now has run almost double the rate of inflation. Tuition for a halfway decent school now frequently surpasses $50,000 a year. How, the average newsreader wonders, can any child not born in a yacht afford to go to school these days?
In a third place, that same reader will see some heartless monster, usually a Republican, threatening to cut federal student lending. The current bogeyman is Trump, who is threatening to slash the Pell Grant program by $3.9 billion, which would seem to put higher education even further out of reach for poor and middle-income families. This too seems appalling, and triggers a different kind of response, encouraging progressive voters to lobby for increased availability for educational lending.
But the separateness of these stories clouds the unifying issue underneath: The education industry as a whole is a con. In fact, since the mortgage business blew up in 2008, education and student debt is probably our reigning unexposed nation-wide scam.
It's a multiparty affair, what shakedown artists call a "big store scheme," like in the movie The Sting : a complex deception requiring a big cast to string the mark along every step of the way. In higher education, every party you meet, from the moment you first set foot on campus, is in on the game.
America as a country has evolved in recent decades into a confederacy of widescale industrial scams. The biggest slices of our economic pie – sectors like health care, military production, banking, even commercial and residential real estate – have become crude income-redistribution schemes, often untethered from the market by subsidies or bailouts, with the richest companies benefiting from gamed or denuded regulatory systems that make profits almost as assured as taxes. Guaranteed-profit scams – that's the last thing America makes with any level of consistent competence. In that light, Trump, among other things, the former head of a schlock diploma mill called Trump University, is a perfect president for these times. He's the scammer-in-chief in the Great American Ripoff Age, a time in which fleecing students is one of our signature achievements.
It starts with the sales pitch colleges make to kids. The thrust of it is usually that people who go to college make lots more money than the unfortunate dunces who don't. "A bachelor's degree is worth $2.8 million on average over a lifetime" is how Georgetown University put it. The Census Bureau tells us similarly that a master's degree is worth on average about $1.3 million more than a high school diploma.
But these stats say more about the increasing uselessness of a high school degree than they do about the value of a college diploma. Moreover, since virtually everyone at the very highest strata of society has a college degree, the stats are skewed by a handful of financial titans. A college degree has become a minimal status marker as much as anything else. "I'm sure people who take polo lessons or sailing lessons earn a lot more on average too," says Alan Collinge of Student Loan Justice, which advocates for debt forgiveness and other reforms. "Does that mean you should send your kids to sailing school?"
But the pitch works on everyone these days, especially since good jobs for Trump's beloved "poorly educated" are scarce to nonexistent. Going to college doesn't guarantee a good job, far from it, but the data show that not going dooms most young people to an increasingly shallow pool of the very crappiest, lowest-paying jobs. There's a lot of stick, but not much carrot, in the education game.
It's a vicious cycle. Since everyone feels obligated to go to college, most everyone who can go, does, creating a glut of graduates. And as that glut of degree recipients grows, the squeeze on the un-degreed grows tighter, increasing further that original negative incentive: Don't go to college, and you'll be standing on soup lines by age 25.
With that inducement in place, colleges can charge almost any amount, and kids will pay – so long as they can get the money. And here we run into problem number two: It's too easy to find that money.
Parents, not wanting their kids to fall behind, will pay every dollar they have. But if they don't have the cash, there is a virtually unlimited amount of credit available to young people. Proposed cuts to Pell Grants aside, the landscape is filled with public and private lending, and students gobble it up. Kids who walk into financial-aid offices are often not told what signing their names on the various aid forms will mean down the line. A lot of kids don't even understand the concept of interest or amortization tables – they think if they're borrowing $8,000, they're paying back $8,000.
Nailor certainly was unaware of what he was getting into when he was 19. "I had no idea [about interest]," he says. "I just remember thinking, 'I don't have to worry about it right now. I want to go to school.' " He pauses in disgust. "It's unsettling to remember how it was like, 'Here, just sign this and you're all set.' I wish I could take the time machine back and slap myself in the face."
The average amount of debt for a student leaving school is skyrocketing even faster than the rate of tuition increase.
In 2016, for instance, the average amount of debt for an exiting college graduate was a staggering $37,172. That's a rise of six percent over just the previous year. With the average undergraduate interest rate at about 3.7 percent, the interest alone costs around $115 per month, meaning anyone who can't afford to pay into the principal faces the prospect of $69,000 in payments over 50 years.
So here's the con so far.
You must go to college because you're screwed if you don't.
Costs are outrageously high, but you pay them because you have to, and because the system makes it easy to borrow massive amounts of money
The third part of the con is the worst: You can't get out of the debt.
Since government lenders in particular have virtually unlimited power to collect on student debt – preying on everything from salary to income-tax returns – even running is not an option. And since most young people find themselves unable to make their full payments early on, they often find themselves perpetually paying down interest only, never touching the principal. Our billionaire president can declare bankruptcy four times, but students are the one class of citizen that may not do it even once.
October 2017 was supposed to represent the first glimmer of light at the end of this tunnel. This month marks the 10th anniversary of the Public Service Loan Forgiveness program, one of the few avenues for wiping out student debt. The idea, launched by George W. Bush, was pretty simple: Students could pledge to work 10 years for the government or a nonprofit and have their debt forgiven. In order to qualify, borrowers had to make payments for 10 years using a complex formula. This month, then, was to start the first mass wipeouts of debt in the history of American student lending. But more than half of the 700,000 enrollees have already been expunged from the program for, among other things, failing to certify their incomes on time, one of many bureaucratic tricks employed to limit forgiveness eligibility. To date, fewer than 500 participants are scheduled to receive loan forgiveness in this first round.
Moreover, Trump has called for the program's elimination by 2018, meaning that any relief that begins this month is likely only temporary. The only thing that is guaranteed to remain real for the immediate future are the massive profits being generated on the backs of young people, who before long become old people who, all too often, remain ensnared until their last days in one of the country's most brilliant and devious moneymaking schemes.
Everybody wins in this madness, except students. Even though many of the loans are originated by the state, most of them are serviced by private or quasi-private companies like Navient – which until 2014 was the student-loan arm of Sallie Mae – or Nelnet, companies that reported a combined profit of around $1 billion last year (the U.S. government made a profit of $1.6 billion in 2016!). Debt-collector companies like Performant (which generated $141.4 million in revenues; the family of Betsy DeVos is a major investor), and most particularly the colleges and universities, get to prey on the desperation and terror of parents and young people, and in the process rake in vast sums virtually without fear of market consequence.
About that: Universities, especially public institutions, have successfully defended rising tuition in recent years by blaming the hikes on reduced support from states. But this explanation was blown to bits in large part due to a bizarre slip-up in the middle of a controversy over state support of the University of Wisconsin system a few years ago.
In that incident, UW raised tuition by 5.5 percent six years in a row after 2007. The school blamed stresses from the financial crisis and decreased state aid. But when pressed during a state committee hearing in 2013 about the university's finances, UW system president Kevin Reilly admitted they held $648 million in reserve, including $414 million in tuition payments. This was excess hidey-hole cash the school was sitting on, separate and distinct from, say, an endowment fund.
After the university was showered with criticism for hoarding cash at a time when it was gouging students with huge price increases every year, the school responded by saying, essentially, it only did what all the other kids were doing. UW released data showing that other major state-school systems across the country were similarly stashing huge amounts of cash. While Wisconsin's surplus was only 25 percent of its operating budget, for instance, Minnesota's was 29 percent, and Illinois maintained a whopping 34 percent reserve.
When Collinge, of Student Loan Justice, looked into it, he found that the phenomenon wasn't confined to state schools. Private schools, too, have been hoarding cash even as they plead poverty and jack up tuition fees. "They're all doing it," he says.
While universities sit on their stockpiles of cash and the loan industry generates record profits, the pain of living in debilitating debt for many lasts into retirement. Take Veronica Martish. She's a 68-year-old veteran, having served in the armed forces in the Vietnam era. She's also a grandmother who's never been in trouble and consid?ers herself a patriot. "The thing is, I tried to do everything right in my life," she says. "But this ruined my life."
This is an $8,000 student loan she took out in 1989, through Sallie Mae. She borrowed the money so she could take courses at Quinebaug Valley Community College in Connecticut. Five years later, after deaths in her family, she fell behind on her payments and entered a loan-rehabilitation program. "That's when my nightmare began," she says.
In rehabilitation, Martish's $8,000 loan, with fees and interest, ballooned into a $27,000 debt, which she has been carrying ever since. She says she's paid more than $63,000 to date and is nowhere near discharging the principal. "By the time I die," she says, "I will probably pay more than $200,000 toward an $8,000 loan." She pauses. "It's a scam, you see. Nothing ever comes off the loan. It's all interest and fees. And they chase you until you're old, like me. They never stop. Ever."
And that's the other thing about lending to students: It's the safest grift around.
There's probably no better symbol of the bankruptcy of the education industry than Trump University. The half-literate president's effort at higher learning drew in suckers with pathetic promises of great real-estate insights (for instance, that Trump "hand-picked" the instructors) and then charged them truckfuls of cash for get-rich-quick tutorials that students and faculty later described as "almost completely worthless" and a "total lie." That Trump got to settle a lawsuit on this matter for $25 million and still managed to be elected president is, ironically, a remarkable testament to the failure of our education system. About the only example that might be worse is DeVry University, which told students that 90 percent of graduates seeking jobs found them in their fields within six months of graduation. The FTC found those claims "false and unsubstantiated," and ordered $100 million in refunds and debt relief, but that was in 2016 – before Trump put DeVry chief Schmoke, of all people, in charge of rooting out education fraud. Like a lot of things connected to politics lately, it would be funny if it weren't somehow actually happening.?"Yeah, it's the fox guarding the henhouse," says Collinge. "You could probably find a worse analogy."
But the real problem with the student-loan story is that it's so poorly understood by people not living the nightmare. There's so much propaganda that blames the borrowers for taking on the debt in the first place that there's often little sympathy for people in hopeless situations. To make matters worse, band-aid programs that supposedly offer help hypnotize the public into thinking there are ways out, when the "help" is usually just another trick to add to the balance.
"That's part of the problem with the narrative," says Nailor, the schoolteacher. "People think that there's help, so what are you complaining about? All you got to do is apply for help."
But the help, he says, coming from a for-profit predatory system, often just makes things worse. "It did for me," he says. "It does for a lot of people."
- Matt Taibbi
- Donald Trump
- Sallie Mae
- Census Bureau
- Real estate
- Printer-friendly version
- Nov 5, 2017 6:35 PM
- Pinto Currency -> Cojones , Nov 5, 2017 7:06 PM
Matt Taibbii is a pedophile. How's Natasha, Matt?Escrava Isaura -> Pinto Currency , Nov 5, 2017 7:11 PM
Taibbi brags about sex assaultThirdWorldNut -> Escrava Isaura , Nov 5, 2017 7:25 PM
Matt gets guys. You guys can't ..Your ideology blinds you.jcaz -> ThirdWorldNut , Nov 5, 2017 7:36 PM
He cant help bash Trump, even though the problem started decades before him. Writer even mentions anecdotes in his article that explicitly say that problem started in last 80s early 90s, but yet somehow Trump is to be blamed.
Open your god damned eyes you morons, its not the nazis, its not Trump either, its the globalization - the same thing globalization you are so wedded to. But then if you think you will pay back 8k if you borrowed 8k, then I doubt you will understand anything. Zero interest only happens under sharia law, may be thats why you love muzzies so much!
PS: if you had trouble paying back when rates were zero, wait till they "normalize". Now, go and bash a nazi, they are ones who have taken all your jobs and put you in debt slavery!Laowei Gweilo -> jcaz , Nov 5, 2017 7:58 PM
So..... This guy is working ONE job, part-time.... How does he fill the rest of his day?
Take away his student loan, he's still living on $18K/yr- you'rebstill broke.
Get a couple more jobs, negro- at least you'll keep yourself too busy for this pity party......Escrava Isaura -> ThirdWorldNut , Nov 5, 2017 7:51 PM
no wonder liberal women are all feminists and hate men
their liberal men are perverts lolMoe Hamhead -> Escrava Isaura , Nov 5, 2017 8:05 PM
The flaw in your thinking is that you associate money with value.
Money has no value. Money should not have a profit on it, meaning interest rate. What is produced is what is valuable.
Say the government has $1 dollar. The government gives it to you and you produce a gadget that you sell for $1.10. Say you made 10 gadgets. Now you have 2 dollars. Pay back the government and now you have your dollar to be in your own.
The function of money is convenience and not value.
Of course these will never happen, because our social contract is based on usury and speculation, meaning profit without producing.Omni Consumer P... -> Escrava Isaura , Nov 5, 2017 8:14 PM
The real flaw is associating "higher" education with value. Get a job. Earn an income. Find an interest for your free time. Raise a family. Spare the four years of wasted time and money.Grimaldus -> Escrava Isaura , Nov 5, 2017 8:18 PM
Just when I thought EI couldn't get any nuttier, here she is.
Keep the posts coming. You're filling the role that was momentarily vacated when Eirik Magnus Larssen finally bailed.NoPension -> Grimaldus , Nov 5, 2017 9:10 PM
Always gives me a chuckle seeing progressives, like Matt Tabi, complain about---------progressives.
Progressives are and have been in charge for over a hundred years.
Embrace your progressive suck.
GrimaldusWhackoWarner -> Escrava Isaura , Nov 5, 2017 8:24 PM
Colleges.....those bastions of conservatism.WhackoWarner -> Cojones , Nov 5, 2017 7:06 PM
sorry honey child. Matt did nothing that was no available in the public record.
KIDDO the story here is his past. Just like all the other cheap abusers. funny that he wrote a book to glorify his sex abuse and "joke" about how cool it was.
No frigging different than Spacey or others. Matt made jokes that implied he was the "great USA journalist" abusing women. Good luck with that Matt.
YOU say.. Matt gets guys you can't?
He documented his scumbag shallowness and abuse. Had to schmooze with his abuse to prove he was an in-crowd Yankee thinker. Deserves to lose it all.WhackoWarner -> Cojones , Nov 5, 2017 8:40 PM
Yeah. I watched him on some interview on PBS? last week.
Well I guess the next interview should include som questions about Natasha and his "use and abuse" and then to add to the flow....his mocking of the behaviour.
Piss off Matt. Your career? Idiiot. Perhaps you can get deal on a rehab suite?WhackoWarner , Nov 5, 2017 7:03 PM
Matt the journalist.
Taibbi would be the Paterno to Ames' Sandusky."
When I went back into the TV room, Andy pulled me aside with a worried grin on his face. 'Dude do you realize do you know how old that Natasha is?' he said.
'No! No, she's fif-teen. Fif-teen.' Right then my pervometer needle hit the red. I had to have her, even if she was homely. I sat down next to her on the couch and fed her another double martini with pineapple juice, and asked her to take off her clothes, to prepare for the Jacuzzi.
After the sex, 15-year-old Natasha told Ames she was the mother of a three-month-old child. Here was his reaction :
It was hard to imagine that Natasha had squatted out a baby. Her cunt was as tight as a cat's ass. I'd slept with mothers before–they're a lot wider. Sex with them is like probing a straw in a mildew-lined German beer mug.
OK Matt tell me more....
We'd ask our Russian staff to flash their asses or breasts for us. We'd tell them that if they wanted to keep their jobs, they'd have to perform unprotected anal sex with us. Nearly every day, we asked our female staff if they approved of anal sex. That was a fixation of ours. "Can I fuck you in the ass? Huh? I mean, without a rubber? Is that okay?" It was all part of the fun.
Fun Matt?PrefabSprout -> WhackoWarner , Nov 5, 2017 7:52 PM
Used to read your writing Matt.
Then saw the article in Briebart regarding you "book" about Russia.
Nice little piece of complete and utter stupidity. YOU just wrote off your career, Maybe rent a pad with Spacey?CunnyFunt , Nov 5, 2017 7:05 PM
Exactly...pay attention, ZH, that is what I was talking about!!!WhackoWarner -> CunnyFunt , Nov 5, 2017 7:10 PM
He "exposes" it?
FFS, there's nothing new here.WestVillageIdiot -> WhackoWarner , Nov 5, 2017 7:56 PM
Yeah there is a predatory lending story here.
But the focus is on the bloody tainted author. He has lost all his carreer ('cept maybe National Toaster Review.).. Piece of shite.
Read it .....he has sooooo much insight and compassion that it runs off the pages of his chuckling abuse stories.WhackoWarner -> WestVillageIdiot , Nov 5, 2017 8:31 PM
Did I miss it or did Taibbi not once mention the public union racket that strangles students? He blames Trump for this mess but not the politicians and unions (all Democrat) that are in bed together, and have been for more than 50 years. These gangsters are the ones who knew kids had an unlimited supply of money, in the form of student loans. This fact made the Education Complex know they could continue to raise prices through the roof. But Taibbi seems to think Betsy Devos is the biggest problem in this whole mess. What a hack!
Taibbi's another one of those guys that got something big right, then gets everything else wrong.Sizzurp , Nov 5, 2017 7:08 PM
Well who is to say that a pervert is unable to have a mind?
Saw Taibbi last week. Smug. guess Natasha was under the table.
Frig them all.
Student loans? OK research. and pretty good articles but the guy is scum and it taints everything he hides.
Kinda like I say "Guy next door is smart and keeps his house pretty........so I turn a blind eye to the fact he rapes his maid"Krungle -> Sizzurp , Nov 5, 2017 7:14 PM
If you want to take the risk of going into debt to attend college, you better come out with skills that are in high demand. Otherwise you are much better off going into the military, or going to trade school. BTW, thank the Clintons for making it impossible to get out of student debt through bankruptcy.Boxed Merlot -> Krungle , Nov 5, 2017 8:16 PM
If you want to give out loans to kids then you should accept the risk that they might default on that debt and leave you with the tab. Let's stop the coddling the banker bullshit. They lobbied to make this loans extremely difficult to discharge in bankruptcy. They wanted all the profit and none of the risk. Let them assume risk and they'll stop handing out loans to unqualified borrowers.t0mmyBerg -> Krungle , Nov 5, 2017 8:50 PM
Amen! If the money for an "education" is more difficult to obtain, that ought to be a clue as to the value of the information / training one is purchasing. The fact it's so easy to get is all one needs to know about the worth of what's being spewed by those dispensing their so-called knowledge / truth.
Allow the lawful discharge through bankruptcy and punish every single financial institution, (and especially their individual persons who oversaw the process), that has profited off of ballooning "principle" amounts that even come close to doubling an original amount with ties to any government official that voted to place these kind of loans in such a category.
This is madness!
"Woe to those who make unjust laws, to those who issue oppressive decrees,..." Isaiah 10:1
jmoCunnyFunt -> Sizzurp , Nov 5, 2017 7:25 PM
Finally at least one person gets it. The inability to discharge student loan debt through the taint of bankruptcy is one of the greatest financial crimes of the last century. Entirely unAmerican. America used to be all about fresh starts. That is one reason our business life is more vibrant than say many places in Europe with less benign laws. Same goes for individuals. If you go through the pain of bankruptcy there is no reason you shouldnt get that debt discharged. Whomever voted for that law, whether Clintons or others should be beaten to death.ElwinCthulhu -> Sizzurp , Nov 5, 2017 7:35 PM
Hobart's 38-week combo welder program costs $16,625. A trained kid willing to travel and work in the field would make more than an engineering graduate who paid a quarter-million for his degree.PrefabSprout -> Sizzurp , Nov 5, 2017 7:54 PM
No mention made of the rats nest Social Justice program$ infesting college and university campuses across the country, at untold cost, worthless sullshit.Boris Badenov -> Sizzurp , Nov 5, 2017 8:14 PM
But if you go into the military, you get poisoned and dehabilitated by bazillion vaccines, which you can't refuse.GreatUncle , Nov 5, 2017 7:09 PM
No, thank W for that. But wait, there's more....WestVillageIdiot -> GreatUncle , Nov 5, 2017 7:58 PM
Stupid cunt ... I can see more people out conning others in society.
This is the educational system that has nothing to do with Trump yet Mark Tabbi project it as if it is.
What about all the student loans racked up under president Obama's term? Not a fucking tweet on that.Pernicious Gold... , Nov 5, 2017 7:10 PM
Facts are racist to The Left.red1chief -> Pernicious Gold Phallusy , Nov 5, 2017 7:49 PM
Nailor should have learned a little math. He might have realized he was about to do something stupid. I have no sympathy for people who sign something they don't understand. And did he not know having kids is expensive? Dick control includes avoiding pregnancies you can't afford.
Plus this person is teaching children.Krungle , Nov 5, 2017 7:11 PM
Yes, it is stupid. I recall seeing the devry ads on TV in the middle of the day, aimed at the unemployed when on summer vacation when I was in junior high. I thought it looked like a scam even back then without even understanding why.JohnG -> Krungle , Nov 5, 2017 8:06 PM
Not that the student loan thing isn't another banker scam, but the lead story doesn't make sense. Firstly, educators get loan forgiveness after a decade or two of public service. And there are income contingent repayment plans. And lawyers have, in fact, been able to get these things discharged. None of this changes the scam that is giving out high interest loans to kids to pursue an education. But you might want to start with a sob story that makes more sense. How about a pediatrician with 400k in loans and making 100k a year living in a coastal city? Or how about the art history majors at private liberal arts schools with 200k in debt making $10/hour as a barista? But teachers are one of the few groups that has an actual federal out.bluskyes , Nov 5, 2017 7:15 PM
Maybe. My wife is a teacher in a Title I, low income school, and had been for 13 years.....
She also has about 13K remaining in student loans, originally federal direct and Perkins loans.
With her over 10 years in title I schools, she should be able to get them forgiven, except that she consolidated these loans before I met her, and now they are "serviced" by AES, a private lender, and they are no longer eligible for discharge.
This I call the "Consolidation Scam."uhland62 -> bluskyes , Nov 5, 2017 7:27 PM
Should have taken a math course first.Cabreado , Nov 5, 2017 7:18 PM
Pay off debt before you have children. There is no law that you must have children, if the debt makes it impossible. I would have liked a lot of tings but could not afford them.dwboston , Nov 5, 2017 7:19 PM
What's the "exposure" part?TheLastTrump -> dwboston , Nov 5, 2017 7:31 PM
Taibbi has some gall to blame Trump, DeVos and others for the student debt explosion, but not one word about Obama or the government's takeover of the student loan market as part of Obamacare? The student loan market was folded into the ACA as part of the fake accounting to make the ACA numbers "work". Every market the govenrment insinuates itself into - housing, health care, college tuition, etc. - gets distorted and costs explode. Taibbi's yet another dishonest liberal.dwboston -> TheLastTrump , Nov 5, 2017 9:11 PM
Yikes- is this factual? If so fuck him. All name, no cattle.
Obama began his turn as destroyer in chief at the height of the Great Recession, everyone & their brother was running into the safety of college & student loans to pay the bills. I recall watching the local parking lots swell. :) So there's that.
But numbers are off the charts every year because younger millennials expect the govt to forgive all those loans at some point. That's how many thought 20 years ago & it's worse today.JohnG -> dwboston , Nov 5, 2017 8:09 PM
"The nexus between the student loan program and ObamaCare is purely opportunistic. As the Affordable Care Act was passing through Congress, its wheels greased by the wholly fraudulent assertion that it didn't need 60 votes to pass the Senate, the administration decided to put in a provision eliminating the private student loan industry, fully federalizing the program. What was not widely understood at the time was that it hoped to raid the funds paid by students to provide money for the bottomless pit known as ObamaCare"MADARA , Nov 5, 2017 7:21 PM
Ya so everything the government touches turns to shit. What's new?allgoodmen , Nov 5, 2017 7:22 PM
New liberal salves completely deserve ther shakles.didthatreallyhappen , Nov 5, 2017 7:22 PM
Good article from Matt Taibbi, but you can count on this bolshevik to leave out Clinton complicity in the for-profit student loan scandals:TheLastTrump , Nov 5, 2017 7:26 PM
liberals can go and suck a dick, they dream of swallowing ejaculateWTFUD -> TheLastTrump , Nov 5, 2017 7:34 PM
American college farm. Biggest swindle there is.
Designed by leftists to pay leftists well- PERIOD.
Your education is an afterthought.red1chief -> WTFUD , Nov 5, 2017 7:45 PM
Nah, think this GIG is Bi-partisan feller!kenny500c , Nov 5, 2017 7:30 PM
All the leftist and rightist rich people I know say the same thing, "anyone without a college degree is a loser".djsmps -> kenny500c , Nov 5, 2017 8:40 PM
No reason student debt should be treated differently from other debts, allow it to be written off in BK court.WTFUD , Nov 5, 2017 7:31 PM
Let me guess. You have a lot of it.
What's Donald doing in Japan when it's Monty Python's Flying Circus on Steroids back Home?
Nov 05, 2017 | www.unz.com
Whether this anger is somehow justified is, of course, a question of immense complexity but let me offer three observations that explain its scope regardless of its justification. My point is that affirmative action and other egalitarian social engineering nostrums inescapably spreads antagonisms beyond those immediately affected by the policies. And the anger will only grow as government keeps pushing the egalitarian fantasy.
First, violating the merit principle, whether in college admissions or hiring police officers guarantees disgruntled white males far in excess of its true victims. Consider hiring five firefighters strictly according to civil service exam scores. Let's assume that a hundred men apply for the position and can be ranked by test scores. The top four are white and are hired. Now, thanks to a Department of Justice consent decree, the fire department must hire at least one African American from the list and if the highest ranking black scores at 20 in the array he will be hired despite his middling score.
How many white males have actually lost their job to a black? The correct answer is exactly one, the fifth ranking applicant. But how many whites will mistakenly believe that they lost out to an affirmative action candidate? The answer is 14 since this is the number of rejected white candidates between 6 and 19 and, to be honest, all can make a legitimate claim of being passed over to satisfy the diversity bean counters. Further fueling this anger is that each of those fourteen "unfairly" rejected applicants may complain to family and friends and thus tales of the alleged injustice multiply though, in fact, only a single white applicant lost out to a less qualified black.
Affirmative action is thus a white grievance multiplier if this information is public (as is often the case in university admissions and in reverse discrimination litigation). No doubt, every Spring when colleges and professional schools such as law and medicine mail out their acceptance/rejection letters, millions of white males can honestly complain that they would have been admitted to their first choice if they had only been black or Hispanic and judged exclusively by test scores. Of course, if the university admitted all those whites who exceeded the scores of the least qualified black, the university would have to dramatically increase the freshman class, a policy that possibly tantamount to admitting nearly every white applicant.
Second, the greater the pressure to increase "diversity" via adding additional under-qualified blacks and Hispanics and not expanding enrollment, the greater the visible gap between affirmative action admittees and all others. Again, everything is purely statistical. For example, in the pre-affirmative action era only a few blacks attended college, nearly all of whom got there on merit. Whites (and Asians) would likely view them as equals, no small benefit in a society obsessed with expunging "racist stereotypes" regarding black intellectual ability.
Now imagine that due to government pressure the number of blacks admitted substantially grew and, unless overall enrollment correspondently expanded, fewer academically borderline whites would be admitted so college life became an experience where smart whites encountered lots of intellectually challenged blacks.
Ironically, as per claims that campus racial diversity provides wonderful learning experiences, what might a white student with, say, a total SAT reading/math score of 1350 learn from his black dorm mate who scored 1150? (This is the average white/black SAT gap.) I'd guess that the white student would learn that it's good to be a favored minority in terms of obtaining full-ride scholarships, internship programs, and job offers from top firms. Try to imagine a better way of teaching about white privilege.
Third, as the political pressure for yet more diversity increases, coercion will correspondingly become more draconian and thus more odious since it takes extra effort to force employers or universities to dig deeper into a thinner and thinner talent pool. A parallel is a parent faced with a child reluctant to eat vegetables. The pressure may begin softly -- enticing junior to eat a few French fries but it will grow stronger as Mom adds disliked turnips, lima beans and cauliflower. At some point, promoting "good nutrition" may require force feeding.
I have personally observed this escalating pressure to diversify college faculty, pressure that even liberal faculty find objectionable. During the 1970s the emphasis was on relatively painless voluntary measures: recruitment committees would append "applicants from previously under-represented groups are encouraged to apply" on job postings, tweaking teaching responsibilities to attract minority candidates, or Deans providing extra funds for the job slot if a black or Hispanic could be hired. Gradually, however, as these benign tactics failed to make the numbers, the apparatchiki tightened the screws -- Provosts would independently scour the market for minority job candidates or appoint a non-departmental "political commissar" to monitor faculty recruitment committee deliberations to insure that no promising minority candidate was overlooked.
Hiring discussions were soon filled with euphemisms such as "targets" or "goals" since quotas were illegal under the 1964 Civil Rights Act. Increasingly, the push for faculty diversity has come to resemble Chinese political indoctrination where even the term "affirmative action" is verboten since it implies unequal ability. At the University of California -- Riverside, for example, all candidates for faculty jobs (including the sciences) must submit a statement describing how they've worked to promote diversity, equity and inclusion in previous positions as graduate students or professors and how they planned to continue to do so once on campus. And guess what? Those who give superior answers to these questions surprisingly turn out to be from historically under-represented groups! Cynthia Larive, Riverside's interim provost, said that avoiding numerical targets "gets people out of thinking about a quota system. We want to hire outstanding faculty members who can help the institution continue to be successful and, most importantly, who can mentor students."
Needless to say, the diversity apparatchiki assume that all liberal white faculty, even those in the hard sciences, are debilitated by implicit bias so they have to be pushed to overcome their doubts about possibly hiring a black physicist from a third-tier school. At Boston College faculty receive special training through the Office of Institutional Diversity to develop strategies to promote diversity and are thus instructed, for example, to avoid "narrow professional networks" (i.e., contacting colleagues at other schools) in seeking out top job candidates. After all, why assume that the next Richard Feynman will have been trained at a MIT or Princeton?
What makes this coerced diversity so hard to swallow is that its purpose rests on a plain-to-see but impossible to express fraud -- the alleged benefits of diversity. Indeed, the elite's obsessive proclamations of this lie far more closely resemble propaganda than celebrating a cliché-like truth. Simply put, if diversity is so wonderful, and in the self-interest of universities and businesses, why must it be imposed forcefully? Surely if it was as beneficial as advertised, there would be no need for disparate impact lawsuits, training to overcome implicit bias and similar measures that resemble mothers punishing junior for not eating his lima beans. Does government and the social justice camp followers really believe that diversity is akin to chocolate or red wine whose consumption hardly needs coercion?
Now for what really fuels the anger over coerced diversity: it is one thing to demand sacrifices
geokat62 , November 5, 2017 at 4:59 am GMTmr.wiffle , November 5, 2017 at 9:24 am GMT
What makes this coerced diversity so hard to swallow is that its purpose rests on a plain-to-see but impossible to express fraud -- the alleged benefits of diversity. Indeed, the elite's obsessive proclamations of this lie far more closely resemble propaganda than celebrating a cliché-like truth and it is hard to imagine a bigger lie than "Diversity is Our Strength."
Why the use of the nebulous term "elites"? Why not call a spade a spade and admit that "Diversity is Our Strength" is a tagline of the Anti-Defamation League (ADL)?
Why not tell your readers that, after working away at it for 100 years, it was the domestic wing of The Lobby that was responsible for getting the non-restrictionist immigration act passed in 1965, which is the biggest reason the US has become such a multicultural society?
This information would have been a useful backdrop to this article.The real problem with AA isn't the occasional less competitive white applicant losing out to an even lower scoring minority. It's the subjective aspects of AA that cause constant inconvenience, conflict and even ridiculous manipulations to level the playing field. The most recent and ridiculous example being the expansion of gender categories along with custom pronouns.Stephen Paul Foster , Website November 5, 2017 at 10:58 am GMT"Racism" is he lynch-pin of this massive shake-down. Proposal: make an operational definition of "racism" and punish anyone who misuses it. Suddenly, the accusations would stop.TonyVodvarka , November 5, 2017 at 12:28 pm GMT
See: http://fosterspeak.blogspot.com/2017/07/against-anti-racism-and-hemeneutics-of.htmlWhen I became a New York City firefighter in 1962, the entrance exam was a multiple choice test on civics and science. The physical exam was a rigorous challenge that most people would have to train for months before, for instance, to get the top score, one had to lift ninety pounds with one arm and seventy pounds with the other. Both tests were graded and the average of the two determined your place on the list. Nowadays, because of a court order to diversify, the written exam tests are largely questions supposedly probing the psychological makeup of the applicant that one would have to be an idiot not to recognize the response wanted. The physical has been largely degraded so that more women can pass it and it is not graded, one simply has to do the minimum to pass. Recently, a black recruit failed probationary school three times and was given a fourth chance. Make of it what you will.OilcanFloyd , November 5, 2017 at 12:50 pm GMTYou are making a huge mistake if you limit the effects of affirmative action to elite college hiring and admissions. Affirmative action cuts through every level of society, and I argue that it's far more of an issue at the lower and middle rungs of society, where most Americans work and live. In many companies, this is the level where you will find their black employees, supervisors, and managers. It's not exactly pleasant to be white in such a situation, and your chances of working your way up from the bottom are slim, no matter how competent or willing to work you are. You could also examine how whites are treated in minority majority cities. Reverse discrimination is just the tip of the iceberg.
To gloss over the full scope and scale of affirmative action is to mock the situation of many of the victims of affirmative action. If you really wish to be honest about "white anger," you would look at the racial violence and rapes directed at whites, and ignored or justified, by the elites and media, as well as the completely unwarranted, unwanted, and undemocratic cultural and demographic changes forced upon the nation/whites over the last 50 years.
JackOH , November 5, 2017 at 1:07 pm GMT@jacques sheeteTG , November 5, 2017 at 1:21 pm GMT
Good points, js. You put a good brake on some of the arguments made here, including my own. Reality is that an unknown percentage of people who are hired by irregular means, such as crony and patronage practices, including ethnic affinity and family relations, do okay, grow into their jobs, and earn the reasonable respect of their peers, superiors, and subordinates. Likewise, the determination of quality of applicant by ordinary standards of merit and seniority can be a bear.Indeed – but be careful what you wish for, you may get it.vera , November 5, 2017 at 1:36 pm GMT
India has a terrible educational system – about half the country is illiterate. But the other half is still bigger than the entire United States, they are desperately poor, and there are tens if not hundreds of millions of children who have been trained from birth only to excel at standardized tests for just the slim change of escaping that overpopulated land. And unlike the much more prosperous Chinese, they speak English and there is no language barrier! All by themselves, Indian nationals could soon fill every academic position in the United States with people who have perfect test scores.
As the barriers between the overpopulated third world and the United States continue to be swept away, it may soon be the children of liberal upper-middle class white Americans who are clamoring for affirmative action – or at least, for less reliance on standardized test scores.@animalogicJoe Hide , November 5, 2017 at 1:50 pm GMT
I was once one of those women who were hired into and trained for a job that had been reserved for males. I was so proud, and so happy the system was changing. My male colleagues were a mix -- some supported me, some less so. But I think all accepted that changes needed to be made.
That law should have had a sunset built into it, though. To keep it "forever" invites abuse that grows over time.As always, identifiers of the main murderous, narcissitic, psychopaths making this anti-merit based agenda happen is necessary. They've used the old divide and conquer strategy of group blame for millennia, "It's them whites, or it's them blacks, or Jews, or etc.etc etc.macilrae , November 5, 2017 at 2:07 pm GMT
Cell phone aps which identify these creeps with retinal scanning, pulse rate changes, facial and body language indicators is an easy & cheap development given today's level of technological advancement. Guess who will oppose its inevitable adoption the most?@Nepemnr
Two others I can think of are the other firemen who must now suffer him, and the community who feels less secure (I personally avoid black doctors, sorry).
Just so – reminds my of how my mom, presenting at emergency with a partially paralyzed left arm and leg, was told "I don't think this is a stroke" by the African resident – and left to wait it out until the CT confirmation the following day.
It would be instructive to see how some of the hardened advocates of affirmative action would behave if given the black-or-white choice on a critical medical issue.
Nov 04, 2017 | lkhill.com
- Nick 7 months ago Totally agree with you. Personally I'll always wear shirt and trousers to work regardless of the dress code. It seems to put me into 'work mode' leaving casual wear to provide me with a disconnect from work for evenings and weekends.
I find this approach to be even more important when I'm working from home. My Son seems to respect the 'do not disturb daddy' when I'm in formal wear.see more
Oct 27, 2017 | www.nakedcapitalism.com
Yves here. Holey moley. One of the good things about working for fancy firms early in my professional life was I saw how much they charged, even when the work was often pedestrian or even dubious. So I was never shy about setting a healthy price for my time. But regardless, how could anyone bid under the minimum wage?
The only time I could see that making any kind of sense would be if you were breaking into a new area and would have reason to expect the client would give you a very valuable reference, or better yet, referrals, if they liked what you did. But my experience has always been that clients who go cheap never appreciate the work done for them.
By Sophie Linden, an editorial assistant at AlterNet's office in Berkeley, CA. Originally published at Alternet
Surround yourself with positivity, exploit all marketing outlets, choose a specialized skill -- this is the repetitive wisdom passed on to every budding creative entrepreneur. Less often do we hear advice like, "increase the price of an invoice," or "make it non-negotiable," especially as it relates to the gendered wages within self-employment.
The freelance market is arguably trending across industries, with some figureheads going so far as to say " freelance is feminist ," mainly because women make up a slight majority. Unfortunately, before feminists get too heady on the issue, we need to look at whether the freelance market is any more "freeing" to the women in it, or if it is liberating any of its entrepreneurial workforce. Right now, it's just another deregulated economy in which workers are underpaid and largely invisible.
A recent study published by HoneyBook gives some visibility to the subject, showing that women in the "creative economy" are actually paid significantly less than their male counterparts, sometimes taking in an average of $5 an hour .
There are many reasons for concern about this wage discrepancy. Not only because HoneyBook found that 63% of men and women believed they were earning equal pay, but also because of the growing workforce within the world of freelance, where there are already 57.3 million freelancers in the U.S .
Industry data from UpWork and the Freelance Labor Union suggests that freelancers will be the majority by 2027, growing three times faster than the U.S. workforce overall, and contributing over $1.4 trillion to the U.S. economy annually. While scenes of cramped coffee shops may be an indicator of this burgeoning workforce, these numbers are still astounding. Without sites like UpWork and HoneyBook, they would also be hard to track.
HoneyBook is the self-employed's business management tool, hosting clients similar to those in the aforementioned study. Labeled under the guise of "creative entrepreneurs," they are working professionals navigating gigs in industries like photography, graphic design and writing. With its niche data, the site analyzed over 200,000 client invoices from October 2016-2017 to look at wage discrepancy, finding that on average women made 32% less than their male competitors . This gap is even larger than the national average, where women earn 24% less than men nationally , 76 cents to the dollar. Troubling news for the largest, opportunist workforce around: that is, women in freelance.
In 2015, women made up 53% of the freelance market . This slight dominance encouraged Sara Horowitz, founder of the Freelance Labor Union, to preemptively call freelancing "feminist." Horowitz argued that the lifestyle of a freelancer was more palatable to the roles women desired, whether that was co-careers or gendered domestic labor. She also argued that freelance work allowed women to avoid male privilege in the workplace, notably the boys club at board meetings .
While some of Horowitz's arguments hold value, we can clearly see how freelance work is still an unequal field, at least if pay is any measure of equality among genders. Women who do enter the field already consider themselves to have less bargaining power . Meanwhile, the majority of invoices in HoneyBook's study quoted a non-negotiable price, meaning women are more likely to charge less for the job. Clearly, the reasons for the gender pay gap are embedded and multi-layered. Nevertheless, the study shows that freelance is not entirely the liberated, equal rights, equal pay landscape Horowitz claims it to be.
Asked why they enter the market, freelancers often cite the flexibility of the work in a number of terms: the ability to be their own boss, as well as the ability to choose their projects and work location. In essence, men and women draw upon idealistic dreams of escaping workplace power-dynamics to find economic independence in their pajamas -- a depiction that has been repeatedly critiqued . Freelancers still enter a labor force that has few congressional protections and is arguably as successful as the social networks you were economically born into. Essentially it is prey to the same laissez-faire ideals that have manipulated structural inequity across generations of workers in the U.S. It just imagines itself differently -- now under the guise of "creative" entrepreneurship.
HoneyBook's research is just one insight into wage gaps. As a largely deregulated economy with unparalleled growth, it is important to make visible the economic and social divides embedded in the independent workforce. We can start by debunking the claim that freelancing is a more equitable field to work in, and with it, the idea that any economy is without prejudice.
ambrit , October 27, 2017 at 8:04 amCrazy Horse , October 27, 2017 at 5:22 pm
I would also argue that so called 'regular' employment is trending towards a "freelance" structure. Job tenures are supposedly shrinking and often going away completely. Now, that salaryman window tribe dweller is often outside of that window, washing it on a piecework basis, with no safety line.
The underlying rationale for the rise of the 'freelance' work structure is to first crapify the freelance 'experience,' with lower wages a must, and then, second, extend the 'neo-crapified' work rules into the previously "safe" 'regular' work world.
The only rational response to managements' claim that "we can get someone to replace you if you do not agree to our demands," is to simply walk away from the "golden opportunity." Sooner or later, all exploitative systems fall apart due to their own internal contradictions. It can be painful, but: No pain (economic micro-dislocation,) no gain (guillotines in Town Square.)
On the feminism front, and please remember that this is an older man writing, I would find any situation where the individual allows outside forces to define said individuals self definition, as the opposite of "liberating." Except in rare cases, what else is 'freelancing' but a "race to the bottom?" If one is to accept the 'freelancing' ethos as presently presented, one may as well embrace the 'contemplative life' and accept fasting and privation as a path to communion with the godhead.Arizona Slim , October 27, 2017 at 8:57 am
Freelancers driving the price of their labor down to $5 per hour because they have to compete against all the other people who can't find steady work is not a feminist issue– its a class issue. And that is no less true if males make $2 more per hour because of sexual discrimination. The real enemy is the billionaire who owns the corporation, the politicians, and the enforcers that grind workers down into virtual servitude.
There is always choice. There are always drugs to be transported and sold, money to be laundered, or accounting fraud to be fabricated. There is always choice even if the consequences are severe. It's long been known that the fastest (and only) way for a woman to become a movie star is on her back.
When a fat pig movie director pushes you down on the "casting couch" there has always been the choice to reach for the Mace or the revolver in the purse. Submitting is prostitution, choice is rejecting greed for riches and fame and joining with others to throw the boot off your neck.Robert Murphy , October 27, 2017 at 9:14 am
There is no organization called the Freelance Labor Union. Horowitz's organization is called the Freelancers Union and it is little more than a buyers club. It has yet to call a strike or organize a picket line. Nor does it call out the companies that exploit freelancers.agkaiser , October 27, 2017 at 9:33 am
$583,283.25 – using the annuity formula from Stewart's 4th edition precalc book (it is surely the same formula in all his books ) & taking that 5 bucks an hour TIMES 2080 hours of pay in a year (40*52) = amount to save every year, for 30 years, at 4% interest.
Now, realistically, whoever underpaid you just bought a few more trinkets for today's mansion, jet, yacht or mistress but you could have saved that money!
rmm.Arizona Slim , October 27, 2017 at 11:56 am
When they turn 50, if they survive that long, they'll be replaced by younger cheaper labor. Nothing really changes, except the words we use to describe our sad condition and the lower and lower age at which we're discarded.Livius Drusus , October 27, 2017 at 9:55 am
Which is why I summarize fifty-plus freelancing this way: Too old to get a job and too young and broke to retire.DJG , October 27, 2017 at 10:38 am
Freelancing is much like entrepreneurship in that it has been way oversold to the public. Most people don't do well either as freelancers or as entrepreneurs and would likely be better off as normal employees. The emphasis on "alternative" work arrangements has taken public attention away from improving the lot of traditional employees and contributes to the devaluation of ordinary workers by suggesting that they are lazy or stupid because they didn't become freelancers or gigsters or entrepreneurs of some sort.
Many young people seem to have fallen into the trap of putting too much emphasis on work flexibility over a steady paycheck. These kinds of alternative work arrangements might be fun and cool when you are in your 20s but not so much after 30 and especially if you want to start a family and need a steady and reliable source of income.Arizona Slim , October 27, 2017 at 12:04 pm
I was a free lance in publishing for about twenty-five years. The tell here is the mention of pajamas: Are we still in the world of people who want to work in their pajamas? One thing I learned right away is that you have to get up each morning, dress like an adult, schedule the number of billable hours that you want to charge for, and send in invoices regularly. The successful free lances, male and female, did so. The people who started work at three in the afternoon, after cocoa with marshmallows all day, didn't succeed.
I suspect that hourly charges among free lances are falling: That is part of our friend "right to work," which keeps wages down. It is also part of the massive amount of outsourcing going on. In publishing, responsibilities that always were kept in house and should remain in house are being outsourced.
I'll also note that one of the reasons that I became a free lance, besides knowing what I could charge for my work, is that many offices are toxic environments socially and politically. There is a lot of stress on conformity. There is no concern for original thinking. Inventing the wheel is considered original.
And as someone who has worked in publishing for many years and knows many talented and powerful women in publishing, I left my last job shortly after the head of the division introduced the new editor in chief for books as a woman. That's right. The first words: M.K. is a woman.
M.K. turned out to be a nonentity who exploited the organization for personal ends. She was a great absentee manager! And I no longer had a desire to be around the endless re-runs of resentments of fellow employees.DJG , October 27, 2017 at 12:34 pm
DJG, you're on to something.
I can remember meeting freelancers in the 1980s and 1990s. The good ones were GOOD. As in, they had waiting lists -- you had to book them a couple of months in advance. And they charged accordingly.
These days, that seldom happens. Why? Because there are too many people who can't find jobs, or they only get hired for part-time work, and they have to fill the rest of their time. Such trends do not make for increasing hourly rates.Ned , October 27, 2017 at 10:42 am
Arizona Slim: My dance card was always filled. But as you mention above, after age 50, I kept thinking, Am I a daring American entrepreneur and sole proprietor, or am I just terminally unemployed (and unemployable)?Arizona Slim , October 27, 2017 at 12:01 pm
OK, what's to stop women from charging higher rates? Lower self esteem? Are their lower wages for each hour worked? Or, do they work fewer hours?
"they are working professionals navigating gigs in industries like photography, graphic design and writing ." Clean, no lifting, paid to create gigs where you don't get your hands dirty, or put your body in perilous exhausting situations.
If women want to earn money, learn to be a plumber. Yes, you will get a face full of shit occasionally, will bleed, get burned and will earn $75 an hour, often in cash.
There's a shortage of linepersons to install power lines. Up on that lift bucket, 80 feet in the air, leaning out and ratcheting in 10,000 volt live wires covered with a rubber shock cloth, you can make astounding amounts of money. Why aren't more women up there? Companies go out of their way to hire women.
No mention of the free labor slave pit called "internships." How many of us have gone through that
voluntary servitude?FluffytheObeseCat , October 27, 2017 at 12:27 pm
I have training in the trades and have worked as a bike mechanic. On the positive side, there's a pride of workmanship that you do not get from office work or from freelancing while sitting at a computer. And there's the camaraderie. I never experienced anything like it -- except in that hot, greasy, dirty bike shop.
On the negative side, you can get too old and broken down to do the work. OTOH, you can be a sit-down freelancer until you die.DJG , October 27, 2017 at 12:39 pm
What stops women from negotiating male-equivalent wages varies. Timidity and poor negotiating skills is part of it. As Yves said above, it helps immensely to have been exposed to the billing practices of real winners in this game. And they are disproportionately men, specifically, men who operate like real machers.
The biggest factor is IMO, information deficit. Professional class people throughout many industries are idiots when it comes to freely discussing remuneration with their fellow wage slaves. Everyone acts as though their compensation package were as private and faintly dirty as .. another package.
It's idiotic. The vast majority of us would be better off if we blurted it out over lunch ever few months. And walking away a few tifmes is key. It's good for you. Likewise, if you do need to take a poorly paid gig some times, treat it as slightly less than full time. Keep lining up others. Create the bare minimum of deliverables as swiftly as you can, and get out. Those who underpay you do not deserve your maximum effort, and they're invariably shitty references, so do not anguish over doing only the job they've paid for.
Just don't stiff or cheat anyone lower down the line if you take an underpaid gig. I watched a guy do that recently on a contract job that put him into contact with me, an under-remunerated grad student. He didn't cheat me, he cheated the agency I worked for of some small use fee. Right in front of me. His consulting firm is not one I'll be looking to work for any time soon.
Also, always write a late charge fee in your contract. 120 day "billing cycles" are abusive garbage in the age of computers. After thirty days, the price goes up.
Women who let themselves get stiffed all the time are a real danger to the interests of the guys in their line of work, not just themselves. I wish more guys could see that.cnchal , October 27, 2017 at 12:48 pm
Fluffy: Yes. Know rates, and have a group of friendly free lances who will tell you what they are being offered these days. And what hourly they will turn down.
Firing clients is a necessity. I learned that from a sole proprietor who I worked for in a small typesetting / editorial / graphic design shop. The customer isn't always right. There are psychic benefits to firing a bad customer. And word sort-a gets around that there are people who / companies that you refuse to take work from.D , October 27, 2017 at 1:51 pm
. . . Why aren't more women up there?
I went through an apprenticeship. It was the only time I was trapped by an employer.
I suspect it's utter mythology that women do not attempt to attain far better paying manual labor jobs than they do.
Speaking of high voltage wires, I know a woman who was in the International Brotherhood of Electrical Workers Union (Brotherhood says it all!). She worked on large commercial construction, such as the NUMI Plant (now Tesla). While she endured it through to her retirement she had a horridly abusive (and life threatening on one occasion) go of it. Sexual harassment (made worse by the fact that she had an hourglass figure), an actual physical threat, knife included, while being locked in a room with someone she had already reported as having harassed her, but was forced to work with him anyway; utter resentment of women on the job; and stunning racism (the black males in that Brotherhood , did not fare much better as to the racism) in the tolerant Bay Area.
As to plumbing, the bay area has current and frequent plumbing school ads on TV which feature no women at all, and a real bro-bro atmosphere which all women who've been sexually harassed are familiar with. At one point in my life, despite having a licensed profession, I offered to apprentice to a plumber who just laughed at me (at the time, I was able to do twenty chin-ups).
And, my experience (pre putting myself through college to attain a livable wage), trying to get a job doing manual labor that actually paid a decent wage was utterly unsuccessful. I did have a nursery job, and a very brief job at a thoroughbred stable (the owner was a horrid human being so I quit). At both of those jobs, the only males were illegal immigrants from Mexico, and the wages in both jobs were under regular minimum wage ag wages.
Further, to imply that 'sit' down jobs don't have their fair share of health damage, is like saying that emotional abuse does not exist, and is not deadly when one's spirit is killed in a situation where the other wields far more economic and social power.
Many, unfortunately too many woman included, still feel that a white or non-black male will do a better job, no matter what that job is. For instance (and I don't know what it's like now) I recollect while waitressing that only males were offered high end, far better tipping, jobs in pricier restaurants. At the time, I never saw a female waitress in a high end restaurant.
Oct 16, 2017 | www.insidehighered.comAngry About Adjuncting? The radical move might be to quit, writes Claire B. Potter. 150 Comments
Recently I stumbled across an article in The New York Times about my favorite topic: online academic rage -- and whether it spikes among those frustrated by the struggle to find a tenure-stream job. "Is there something about adjunct faculty members that makes them prone to outrageous political outbursts?" Colby College sociologist Neil Gross asked.
Citing recent examples in which the most vulnerable among us have been fired for an impolitic tweet or Facebook post, Gross argues that full-time faculty members are not the "tenured radicals" that American conservatives have feared since the 1990s. Instead, he proposes, the vast majority of full-timers are "tamed" by the prospects, or long-term comforts, of tenure. Research accounts, regular raises, the orderliness of being able to plan our lives and the satisfaction of promises kept inevitably sutures most of us to civility in all its forms.
But what incentives do workers who are already vulnerable in so many ways have to be polite? Although many people with humanities Ph.D.s do other jobs, this stubborn belief that they have trained for one thing, and one thing only, keeps many adjuncts on the hamster wheel long past a time when frustration and sorrow have turned to rage. Aside from the stress of trying to piece together a career one course at a time, the adjunct army -- permanently contingent, underemployed, overworked and underpaid faculty members -- has every reason to demand radical change.
But do these conditions produce a truly political radicalism, or are they simply radical utterances that get contingent faculty into trouble and leave a system that relies on a reserve army of labor unchanged? And since people with doctorates aren't tied to a particular factory or industry, would the radical solution be to stop teaching as a per-course adjunct?
... ... ...
Academic Ranter , October 16, 2017 10:57 AMDudewithtwoBAsMAMFAandPhD -> Academic Ranter , October 16, 2017 7:37 PM
There are two types of problems here. One concerns the individual misfortunes that plague adjuncts. Adjuncts' problems are lamentable, even if solvable, and it would be nice to see people in our society have some compassion rather than excuse their own apathy with callous blaming of people in unfortunate circumstances.
The other problem is systemic. This is the vicious, capitalist devaluation of academic labor. Anyone who holds some asinine fantasy about the "logic" of the market solving the adjunctification of the academy needs to shut up. You do terrible damage to our society. The simplest and most obvious solution to a lack of PhDs to work as adjuncts is to hire MAs.
Universities are already hiring undergrads to do some of the academic work. You are off your gourd if you think the people who want to siphon profits to the top will not try to further degrade academic labor, or, haven't you been paying attention to the hoopla around MOOCs? The only solution to the precariate is unionization and a demand for all academic labor to provide middle-class standards of living.
That means that the cowardly and lazy tenured faculty will finally have to do their jobs and guard the academy.RBatty024 -> Academic Ranter , October 16, 2017 12:50 PM
I agree with most of what you say, except that my experience says that administrations would rather hire MAs than PhDs because PhDs demand the salaries that align with their higher education; and, because PhDs are generally more experienced in academe, they are less agreeable than MAs to accepting administrative initiatives that are tangential to faculty teaching and research.CuriousHamster -> RBatty024 , October 16, 2017 7:14 PM
"The simplest and most obvious solution to a lack of PhDs to work as adjuncts is to hire MAs."
This is already occurring, even outside of the humanities. I know some great instructors without their doctorate, but hiring a large number of instructors without a terminal degree does seem to go against the ideal that a professor teaches undergraduates, keeps up with the latest in his or her field, and produces knowledge in that field.
While in a master's program at a large research institute, I was given my own classes, even though I only had a bachelor's degree. I was happy to get the experience, but with my background, I probably should not have been teaching those studentshrhdhd -> CuriousHamster , October 16, 2017 9:48 PM
Actually, if you look at 50-60 year old faculty lists a fair number of faculty had masters. Masters were originally meant to be a teaching qualification, PhDs were a research qualification. The masters as a teaching qualification got squeezed out because of too many PhDs between 2 and 3 generations back.TheJonesest , October 16, 2017 8:13 AM
Not at community colleges.Aaron Barlow -> TheJonesest , October 16, 2017 11:50 AM
Adjuncting is not now, and was never meant to be, a career. We can complain about working conditions, lack of benefits/stability, and the stress of cobbling together enough courses to pay the rent all we want (and we do) but the bottom line is this: If you haven't landed a FT teaching gig within three years of earning your Ph.D., bail out and choose another career. The person who can't eat after 20 years of adjunct work has no one to blame but themselves. Keep fighting, but take care of yourself, too.AdjunctNYC -> Aaron Barlow , October 16, 2017 1:59 PM
Whether "meant" to be a career or not, adjuncting is a career for many--and our institutions have made it that way by refusing to hire enough full-time professors to cover the courses offered. Adjuncts are being exploited by institutions across the country. THAT is what we need to focus on, not individual career choices.Michael Dixon -> TheJonesest , October 17, 2017 6:12 PM
I agree. Blaming adjuncts for being adjuncts, wishing they would not have enrolled in PhD programs, and encouraging them to take jobs in fields for which they did not study (alt-ac), is a very ugly game.
This is compounded by the fact that people of color and women are far less likely to be on the tenure line. None of this seems to bother the rising tide of neoliberal academics, who almost without exception have never worked off the tenure track, and maintain pushing people toward careers they do not want to do, are not educated to do, and could do with out a PhD, is a way to solve the problem.
I don't know if neoliberal professors are increasing in numbers or if they just have greater access to publish. I imagine it's the latter. The take on the situation from those off the tenure track is quite the opposite, obviously. This is what we need to reiterate: "Adjuncts are being exploited by institutions across the country. THAT is what we need to focus on"RedinHigherEd , October 16, 2017 9:39 AM
There is no reason the job has to be set up the way it is. Most colleges & universities use far more adjuncts than fluctuation in enrollment and funding would account for.
The "too many Ph.D's" argument falls apart when you think about how easy it is to get an adjunct job. Two of the four districts I've worked in didn't even do a formal interview. I just met with the department chair to discuss when I was available. I work more than the equivalent of full time at two different districts every semester, so theoretically, one full time job could exist for me.
My wife is a K-12 public school teacher, and her first year teaching, she made as much as I did after ten years as an adjunct with a master's (except she didn't have to work summers and did get health insurance for our whole family).
We could probably fix it in a cost neutral way if administrative positions and salaries weren't growing faster than the number of full time teaching positions.
As an academic you should know that the way things are wasn't handed down by god, and isn't an immutable law of nature. Someone made it this way and it can be unmade too.
Frankly, I feel sorry for you as I do for the administrators and full time faculty who look down on their adjunct colleagues. You have been a subject in a real life Milgram or Stanford Prison experiment and took the baitrob -> RedinHigherEd , October 16, 2017 12:43 PM
Fair warning, what I'm about to say is completely anecdotal. I'm a career advisor and every once and a while an adjunct faculty person will come visit career services for assistance. They are generally completely absent of career management skills. They tend to be people who were very good at college, so they went to grad school sort of assuming they'd be able to get a job that way.
They continued to do no meaningful career planning while in grad school, and after completing were able to use their familiarity with college systems to piece together some adjunct work. When asked simple questions such as "what types of careers outside of academia have you explored?" they are unable to answer.
They lack the ability to identify and describe their transferable skills, have only shallow understanding of what career paths are available, and struggle to engage in even simple job search tasks. These are extremely intelligent people with a huge gap in their career competencies.
I think a major reason we don't see more adjuncts quit and move to other industries or even other roles on campus is because they simply do not know how.RedinHigherEd -> rob , October 17, 2017 11:48 AM
On the flip side of this though is the fact that those with a lot of applied (in terms of non academic aspects) work in their field often do not fair as well in FT searches. Those from working class backgrounds or who worked throughout grad school are often seen as less desirable in searches even though they are the ones who are most likely to know how to advise students on realistic career paths. I finished my PhD with 10 years of industry experience in the non profit, consulting, and governmental sectors but even at undergraduate serving institutions this often had less cache then the handful of publications I had produced.Yiddishist -> RedinHigherEd , October 16, 2017 7:14 PM
Yeah it's a catch 22 for grad students. If they take the time to get industry experience, that will help them volumes in alt ac careers, but ding them in academic ones.
All that your comment shows is that adjuncts are easy targets, even for career advisors. The fact that you recognize your comment as anecdotal does not exempt you from giving information about how many cases your negative generalizations were made from, at what type of higher education institution you encountered them, and so on. I have not noted any defects of the type you claim in career skills, and I have known scores of adjuncts, but I would be far more cautious than you are about generalizing either way. I would go so far as to say that the ones I have known compare favorably to law students and the many job applicants I worked with as a job-placement specialist at an employment agency in Manhattan some years ago. I worked as an adjunct myself for some time, and found few jobs that so hone one's survival skills, in the employment market and elsewhere.
www.chronicle.comOctober 3, 2017
The CIA Within Academe 21 Comments
Book documents how foreign and domestic intelligence agencies use -- and perhaps exploit -- higher education and academe for spy operations.
Foreign and domestic intelligence services spar and spy on one another all across the world. But it would be naïve to think it's not happening in the lab or classroom as well.
In his new book, Spy Schools: How the CIA, FBI and Foreign Intelligence Secretly Exploit America's Universities ( Henry Holt and Company ), investigative journalist Daniel Golden explores the fraught -- and sometimes exploitative -- relationship between higher education and intelligence services, both foreign and domestic. Chapters explore various case studies of the Central Intelligence Agency and Federal Bureau of Investigation using the open and collaborative nature of higher education to their advantage, as well as foreign governments infiltrating the U.S. via education.
"It's pretty widespread, and I'd say it's most prevalent at research universities," Golden, an editor at ProPublica and an alumnus of The Boston Globe 's "Spotlight" team, told Inside Higher Ed . "The foreign intelligence services have the interest and the opportunity to learn cutting-edge, Pentagon-funded or government-funded research."
Golden, who has also covered higher education for The Wall Street Journal , previously wrote about the intersection of wealth and admissions in his 2006 book The Price of Admission .
Each of the case studies in Spy Schools , which goes on sale Oct. 10, is critical. One could read the chapters on the Chinese government's interest in U.S. research universities as hawkish, but then turn to the next chapter on Harvard's relationship with the CIA and read it as critical of the American intelligence establishment as well.
"People of one political persuasion might focus on [the chapters regarding] foreign espionage; people of another political persuasion might focus on domestic espionage," Golden said. "I try to follow where the facts lead."
Perhaps the most prestigious institution Golden examines is Harvard University, probing its cozy relationship with the CIA. (While Harvard has recently come under scrutiny for its relationship with the agency after it withdrew an invitation for Chelsea Manning to be a visiting fellow -- after the agency objected to her appointment -- this book was written before the Manning incident, which occurred in September.) The university, which has had varying degrees of closeness and coldness with the CIA over the years, currently allows the agency to send officers to the midcareer program at the Kennedy School of Government while continuing to act undercover, with the school's knowledge. When the officers apply -- often with fudged credentials that are part of their CIA cover -- the university doesn't know they're CIA agents, but once they're in, Golden writes, Harvard allows them to tell the university that they're undercover. Their fellow students, however -- often high-profile or soon-to-be-high-profile actors in the world of international diplomacy -- are kept in the dark.
"Kenneth Moskow is one of a long line of CIA officers who have enrolled undercover at the Kennedy School, generally with Harvard's knowledge and approval, gaining access to up-and-comers worldwide," Golden writes. "For four decades the CIA and Harvard have concealed this practice, which raises larger questions about academic boundaries, the integrity of class discussions and student interactions, and whether an American university has a responsibility to accommodate U.S. intelligence."
But the CIA isn't the only intelligence group operating at Harvard. Golden notes Russian spies have enrolled at the Kennedy School, although without Harvard's knowledge or cooperation.
When contacted by Inside Higher Ed , Harvard officials didn't deny Golden's telling, but defended the university's practices while emphasizing the agreement between the university and the CIA -- which Golden also writes about -- on not using Harvard to conduct CIA fieldwork.
"Harvard Kennedy School does not knowingly provide false information or 'cover' for any member of our community from an intelligence agency, nor do we allow members of our community to carry out intelligence operations at Harvard Kennedy School," Eric Rosenbach, co-director of the Kennedy School's Belfer Center for Science and International Affairs, said in a statement.
While Golden said the CIA's involvement on campus raises existential questions about the purpose and integrity of higher education, Harvard maintained that the Kennedy School was living up to its mission.
"Our community consists of people from different spheres of public service. We are proud to train people from the U.S. government and the intelligence community, as well as peace activists and those who favor more open government," Rosenbach said in his statement. "We train students from a wide range of foreign countries and foreign governments, including -- among others -- Israel, U.K., Russia and China. That is consistent with our mission and we are proud to have that reach."
On the other hand, other countries are interested in exploiting U.S. higher education. Golden documents the case of Ruopeng Liu, a graduate student at Duke University who siphoned off U.S.-government-funded research to Chinese researchers. Liu eventually returned to China and has used some of the research for his Chinese-government-funded start-up ventures.
Golden is comprehensive, interviewing Duke researchers who worked with Liu, as well as dispatching a freelance journalist in China to interview Liu (he denied wrongdoing, saying his actions were taken as part of higher education's collaborative norms regarding research projects). Despite questions that arose while Liu was a student, he received his doctorate in 2009 without any formal questions or pushback from the university. A week before Liu defended his dissertation, Golden notes that Duke officials voted to move forward in negotiations with the Chinese government regarding opening a Duke campus in China -- raising questions about whether Duke was cautious about punishing a Chinese student lest there were negative business implications for Duke. ( The building of the campus proved to be a controversial move in its own right. )
The Duke professor Liu worked under told Golden it would be hard to prove Liu acted with intentional malice rather than out of genuine cultural and translational obstacles, or ethical slips made by a novice researcher. Duke officials told Inside Higher Ed that there weren't any connections between Liu and the vote.
"The awarding of Ruopeng Liu's degree had absolutely no connection to the deliberations over the proposal for Duke to participate in the founding of a new university in Kunshan, China," a spokesman said in an email.
These are just two chapters of Golden's book, which also goes on to document the foreign exchange relationship between Marietta College, in Ohio, and the controversial Chinese-intelligence-aligned University of International Relations. Agreements between Marietta and UIR, which is widely regarded a recruiting ground for Chinese intelligence services, include exchanging professors and sending Chinese students to Marietta. Conversely, Golden writes, as American professors teach UIR students who could end up spying on the U.S., American students at Marietta are advised against studying abroad at UIR if they have an interest in working for the government -- studying at UIR carries a risk for students hoping to get certain security clearances. Another highlight is the chapter documenting the CIA's efforts to stage phony international academic conferences, put on to lure Iranian nuclear scientists as attendees and get them out of their country -- and in a position to defect to the U.S. According to Golden's sources, the operations, combined with other efforts, have been successful enough "to hinder Iran's nuclear weapons program."
But Golden's book doesn't just shed light on previously untold stories. It also highlights the existential questions facing higher education, not only when dealing with infiltration from foreign governments, but also those brought on by cozy relationships between the U.S. intelligence and academe.
"One issue is American national security," Golden said. "Universities do a lot of research that's important to our government and our military, and they don't take very strong precautions against it being stolen," he said. "So the domestic espionage side -- I'm kind of a traditionalist and I believe in the ideal of universities as places where the brightest minds of all countries come together to learn, teach each other, study and do research. Espionage from both sides taints that that's kind of disturbing."
After diving deep into the complex web that ties higher education and espionage together, however, Golden remains optimistic about the future.
"It wouldn't be that hard to tighten up the intellectual property rules and have written collaboration agreements and have more courses about intellectual safeguards," he said. "In the 1970s, Harvard adopted guidelines against U.S. intelligence trying to recruit foreign students in an undercover way they didn't become standard practice [across academe, but], I still think those guidelines are pertinent and colleges would do well to take a second look at them."
"In the idealistic dreamer mode, it would be wonderful if the U.N. or some other organization would take a look at this issue, and say, 'Can we declare universities off-limits to espionage?'"
Nicholas Dujmovic , October 3, 2017 8:18 AMGrace Alcock -> Nicholas Dujmovic , October 4, 2017 1:30 AM
Equating the presence and activities of US intelligence on campuses with that of foreign intelligence is pretty obtuse moral relativism. US academia and US intelligence alike benefit from cooperation, and the American people are the winners overall. By the way, is it really necessary to twice describe this relationship as "cozy"? What does that mean, other to suggest there's something illicit about it?alsotps -> Nicholas Dujmovic , October 3, 2017 5:20 PM
It'd be nice if American intelligence was paying a bit more attention to what goes on in academic research--as far as I can tell, the country keeps making policies that don't seem particularly well-informed by the research in relevant areas. Can we get them to infiltrate more labs of scientists working on climate change or something?
Maybe stick around, engage in some participant observation and figure that research out? It's not clear they have any acquaintance with the literature on the causes of war. Really, pick a place to start, and pay attention.Nicholas Dujmovic -> alsotps , October 4, 2017 12:38 PM
If you cannot see how a gov't intelligence agency, prohibited from working in the USA by statute and who is eye-deep in AMERICAN education is wrong, then I am worried. Read history. Look back to the 1970's to start and to the 1950's with FBI and the military agents in classrooms; then read about HUAC.
Now, look back to Stalin, Hitler, Franco, Mao, Mussolini et.al with THIER use of domestic agencies to impose lock-step thinking and to ferret out free-thinkers.
Get it? it is 'illicit!"Former Community College Prof -> Nicholas Dujmovic , October 3, 2017 12:12 PM
Actually, I read quite a bit of history. I also know that US intelligence agencies are not "prohibited from working in the USA." If they have relationships in academia that remind you of Stalin, Hitler, etc., how have US agencies "imposed lock-step thinking and ferreted out free-thinkers?" Hasn't seemed to work, has it? Your concern is overwrought.alsotps -> Former Community College Prof , October 3, 2017 5:21 PM
"Cozy" might refer to the mutual gains afforded by allowing the federal government to break many rules (and laws) while conducting their "intelligence operations" in academe. I do not know if I felt Homeland Security should have had permission to bring to this country, under false premises supported by ICE and accrediting agencies, thousands of foreign nationals and employed them at companies like Facebook, Apple, Morgan Stanley and the U.S. Army. While Homeland Security collected 16K tuition from each of them (and the companies that hired these F-1s didn't have to pay FICA) all our nation got was arrests of 20 mid level visa brokers.
Personally, I think cozy was quite complimentary as I would have chosen other words. Just imagine if there are additional "undercover students" with false credentials in numbers significant enough to throw off data or stopping universities and colleges from enforcing rules and regulations. If you set up and accredit a "fake university" and keep the proceeds, it strikes me as illicit.Trevor Ronson -> Nicholas Dujmovic , October 3, 2017 2:36 PM
Hey...don't imagine it. Read about Cointelpro and military 'intelligence' agents in classes in the early 1970's....alsotps -> Trevor Ronson , October 3, 2017 5:16 PM
And behaving as if the "the presence and activities of US intelligence on campuses" is something to accept without question is also "obtuse moral relativism". We are talking about an arrangement wherein a / the most prestigious institutions of higher learning has an established relationship with the CIA along with some accepted protocol to ongoing participation.
Whether it is right, wrong, or in between is another matter but please don't pretend that it's just business as usual and not worthy of deeper investigation.George Avery , October 3, 2017 9:46 AM
Unfortunately for many people, it IS business as usual.alsotps -> George Avery , October 3, 2017 5:22 PM
It is amazing how many biochemists and microbiologists from the People's Republic of China would e-mail me asking if I had a position in my "lab," touting their bench skills, every time I published a paper on the federal bioterrorism program, medical civic action programs, etc.
Never mind that I primarily do health policy and economics work, and have not been near a lab bench since I returned to school for my doctorate.....anything with a defense or security application drew a flurry of interest in getting involved.
As a result, I tended to be very discerning in who I took on as an advisee, if only to protect my security clearance.John Lobell , October 3, 2017 6:25 AM
PAr for the course for both UG and grad students from China who have not paid a head hunter. ANY school or program offering money to international students was flooded by such inquiries. Get over yourself.jloewen , October 3, 2017 10:38 AM
When I started teaching 48 years ago, the president of my college was James Dovonan, Bill Donovan's (founder of the OSS) brother, portrayed by Tom Hanks in the movie, "Bridge of Spies."
We had a program in "Tropical Architecture" which enrolled students form "third world" countries. Rumor was -- --alsotps -> jloewen , October 3, 2017 5:24 PM
When I got my Ph.D. from Harvard in 1968, the Shah of Iran got an honorary doctorate at the same commencement. The next year, by pure coincidence!, he endowed three chairs of Near Eastern Studies at H.U.Kevin Van Elswyk , October 3, 2017 9:31 AM
Absolutely a coincidence! You don't think honoraria have anything whatsoever to do with the Development Office do you? (Snark)Robert4787 , October 4, 2017 6:28 PM
And we are surpised?TinkerTailor1620 , October 3, 2017 5:29 PM
So glad to see they're on campus. Many young people now occupy the CIA; the old "cowboys" of the Cold War past are gone. U may find this interesting>> http://osintdaily.blogspot....Phred , October 3, 2017 1:49 PM
Hundreds of government civil servants attend courses at the Kennedy School every year. That a few of them come from the CIA should be no surprise. It and all the other intelligence agencies are nothing more than departments within the federal government, just like Veterans Affairs, Health and Human Services, the FDA, Energy, and so on. Nothing sneaky or suspicious about any of it. Why anyone with cover credentials would tell the Kennedy School admin that is beyond me. When I was in cover status, I was in cover status everywhere; to not be was to blow your cover, period, and was extremely dangerous.
Beyond NIH funded grant-based research, Homeland Security, Energy, Defense, and the Intelligence Community agencies have long histories of relationships with American academia. This could be funded research, collaborative research, shared personnel relationships, or all other manner of cooperation. Sometimes it's fairly well known and sometimes it's kept quiet, and sometimes it's even classified. But it is much more extensive and expansive than what Golden describes, and much less "cozy" or suspicious.alsotps -> Phred , October 3, 2017 5:25 PM
For years I have said that it is foolish to look to universities for moral guidance, and this story is one more instance. In this case, the moral ground is swampy at best, and the universities do not appear to have spent a lot of time worrying about possible problems as long as the situation works to their advantage financially.Jason , October 4, 2017 6:34 PM
The key, here, is financially. The bean counters and those whose research is funded don't look hard at the source of the funding. Just so it keeps coming.Sanford Gray Thatcher , October 4, 2017 6:13 PM
Academic treason.donald scott , October 3, 2017 6:05 PM
Does Golden discuss at all the way in which the CIA and other intelligence services funnel money into academic research without the source of the funding ever being revealed? This was common practice in the 1960s and 1970s, and colleges like MIT were among those involved in this chicanery.
Remember also how intelligence agency money was behind the journal Encounter? Lots of propaganda got distributed under the guise of objective social science research.
Where has IHE been for the past several decades? Read Rosenfeld's book, Subversives..... about the FBI's illegal acts at Berkeley. Or read this, a summary of his book: https://alumni.berkeley.edu... Or read George R. Stewart, The Year of the Oath.
In the research for my biography of Stewart I found significant information about CIA presence on the UC Berkeley campus, in the mid-twentieth century, which reached in to the highest levels of the administration and led to a network of "professors" recruited by that unAmerican spy agency.
The oaths, the current gender wars and the conviction by accusation of harassment are all later attempts to politicize education and turn fiat lux into fiat nox. IHE should be writing more about that and about the current conviction by sexual accusation, and the effect of such on free thought and free inquiry.
Oct 10, 2017 | www.chronicle.comSpies on Campus
How the CIA secretly exploits higher educationPremium content for subscribers. Subscribe Today
Graham Spanier rolled out the red carpet for the intelligence services to conduct covert operations involving colleges.
Oct 17, 2017 | www.nakedcapitalism.com
Yves here. On the one hand, as someone who is getting to be pretty long in tooth, I'm not sure about calling un and under-employed older workers "spare". But when the alternative is being thrown on the trash heap, maybe that isn't so unflattering.
Even though this analysis is from Australia, most of if not all of its finding would almost certainly prove out in the US. However, there is a whole 'nother set of issues here. Australia is 85% urban, with most of the population living in or near four large cities. So its labor mobility issues are less pronounced than here. Moreover, a lot of the whinging in the US about worker shortages, as even readers of the Wall Street Journal regularly point out in its comment section is:
1. Not being willing to pay enough to skilled workers, which includes not being willing to pay them to relocate
2. Not being willing to train less skilled workers, as companies once did as a matter of course
By Leith van Onselen. Originally published at MacroBusiness
A few weeks back, the Benevolent Society released a report which found that age-related discrimination is particularly rife in the workplace, with over a quarter (29%) of survey respondents stating they had been turned down for a job because of their old age, whereas 14% claimed they had been denied a promotion because of their old age.
Today, the Regional Australia Institute (RAI) has warned that Australia is facing a pension crisis unless employers stop their "discrimination" against older workers. From The ABC :
[RAI] has warned the Federal Government's pension bill would rise from $45 billion to $51 billion within three years, unless efforts were made to help more mature workers gain employment, particularly in regional communities.
Chief executive Jack Archer said continued unemployment of people older than 55 would cut economic growth and put a greater strain on public resources.
"We hear that there is a lot of people who would like to work, who would love to stay in the workforce either part-time or full-time even though they're in their late 50s, 60s and even into their 70s," he said.
"But we're not doing a very good job of giving them the training, giving them the incentives around the pension, and working with employers to stop the discrimination around employing older workers"
"It basically means you've got a lot of talent on the bench, a lot of people who could be involved and contributing who are sitting around homes and wishing they were doing something else," he said
Mr Archer said as the population aged the workforce shrank, and that risked future economic growth.
But he said that could be reversed provided employers embraced an older workforce
"[When] those people are earning [an income], their pension bills will either disappear or be much lower and the government will get a benefit from that."
For years the growth lobby and the government has told us that Australia needs to run high levels of immigration in order to alleviate so-called 'skills shortages' and to mitigate an ageing population. This has come despite the Department of Employment showing that Australia's skills shortage "remains low by historical standards" and Australia's labour underutilisation rate tracking at high levels:
Economic models are often cited as proof that a strong immigration program is 'good' for the economy because they show that real GDP per capita is moderately increased via immigration, based on several dubious assumptions.
The most dubious of these assumptions is that population ageing will necessarily result in fewer people working, which will subtract from per capita GDP (due to the ratio of workers to dependents falling).
Leaving aside the fact that the assumed benefit to GDP per capita from immigration is only transitory, since migrants also age (thereby requiring an ever-bigger immigration intake to keep the population age profile from rising), it is just as likely that age-specific workforce participation will respond to labour demand, resulting in fewer people being unemployed. This is exactly what has transpired in Japan where an ageing population has driven the unemployment rate down to only 2.8% – the lowest level since the early-1990s:
The ABS last month revealed that more Australians are working past traditional retirement age, thereby mitigating concerns that population ageing will necessarily reduce the employment-to-population ratio:
Clearly, however, there is much further scope to boost workforce participation among older workers.
Rather than relying on mass immigration to fill phantom 'labour shortages' – in turn displacing both young and older workers alike – the more sensible policy option is to moderate immigration and instead better utilise the existing workforce as well as use automation to overcome any loss of workers as the population ages – as has been utilised in Japan.
It's worth once again highlighting that economists at MIT recently found that there is absolutely no relationship between population ageing and economic decline. To the contrary, population ageing seems to have been associated with improvements in GDP per capita, thanks to increased automation:
If anything, countries experiencing more rapid aging have grown more in recent decades we show that since the early 1990s or 2000s, the periods commonly viewed as the beginning of the adverse effects of aging in much of the advanced world, there is no negative association between aging and lower GDP per capita on the contrary, the relationship is significantly positive in many specifications.
The last thing that Australia should be doing is running a mass immigration program which, as noted many times by the Productivity Commission cannot provide a long-term solution to ageing, and places increasing strains on infrastructure, housing and the natural environment.
The sustainable 'solution' to population ageing is to better utilise the existing workforce, where significant spare capacity exists.
Enquiring Mind , October 17, 2017 at 10:26 amVatch , October 17, 2017 at 11:29 am
At what point might an impatient constituency demand greater accountability by its elected representatives? In the business world, the post-2000 accounting scandals like Enron resulted in legislation to make company execs sign off on financial statements under threat of harsh personal penalties for misrepresentation. If legislators were forced by constituents to enact similar legislation about their own actions, the transparency could be very enlightening and a type of risk reduction due to acknowledgement of material factors. Imagine seeing in print the real reasons for votes, the funding sources behind those votes and prospect of jail time for misrepresentation about what is just their damn job. Call it Truth-In-Legislating, similar to the prior Truth-In-Lending act.sgt_doom , October 17, 2017 at 2:11 pm
It's a nice idea, but I don't think that very many executives have been penalized under the Sarbanes Oxley Act. Jamie Dimon certainly wasn't penalized for the actions of the London Whale. I guess we'll see what happens in the near future to the executives of Wells Fargo. I suspect that a Truth-In-Legislating law would be filled with loopholes or would be hampered by enforcement failures, like current Congressional ethics rules and the Sarbanes Oxley Act.RUKidding , October 17, 2017 at 10:55 am
At what point might an impatient constituency demand greater accountability by its elected representatives?
At that point when they start shooting them (as they did in Russian in the very early 1900s, or lop their heads off, as they once did in France).
Personally, I'll never work for any Ameritard corporation ever again, as real innovation is not allowed, and the vast majority are all about financialization in some form or other!
My work life the past thirty years became worse and worse and worse, in direct relation to the majority of others, and my last jobs were beyond commenting up.
My very last position, which was in no manner related to my experience, education, skill set and talents -- like too many other American workers -- ended with a most tortuous layoff: the private equity firm which was owner in a failed "pump and dump" brought a "toxic work environment specialist" whose job was to advise the sleazoid senior executives (and by that time I was probably one of only four actual employee workers there, they had hired a whole bunch of executives, though) on how to create a negative work environment to convince us to leave instead of merely laying us off (worked for two, but not the last lady there I myself).
The American workplace sucks big time as evidenced by their refusal to raise wages while forever complaining about their inability to find skilled employees -- they are all criminals today!jrs , October 17, 2017 at 1:34 pm
Interesting article and thanks.
I lived and worked in Australia in the late '70s and early '80s. Times were different. Back then, the government jobs came with mandatory retirement. I believe (but could be wrong) that it was at 63, but you could request staying until 65 (required approval). After that, one could continue working in the private sector, if you could find a job.
The population was much less than it is now. I believe the idea was to make room for the younger generation coming up. Back then, government workers, as well as many private sector workers, had defined benefit pension plans. So retiring younger typically worked out ok.
I had one friend who continued working until about 70 because she wanted to; liked her job; and wasn't interested in retiring. However, I knew far more people who were eager to stop at 63. But back then, it appeared to me that they had the financial means to do so without much worry.
Things have changed since then. More of my friends are putting off retirement bc they need the money now. Plus defined benefit pension plans have mostly been dispensed with and replaced by, I believe (I'm not totally clear on this), the Aussie version of a 401 (k) (someone can correct me if I'm wrong).
What the article proposes makes sense. Of course here in the USA, older workers/job seekers face a host of discriminatory practices, especially for the better paying jobs. Nowadays, though, US citizens in their golden years can sell their house, buy an RV, and become itinerant workers – sometimes at back breaking labor, such as harvesting crops or working at an Amazon gulag – for $10 an hour. Yippee kay-o kay-aaay!
So let us also talk about cutting Medicare for all of those lazy slacker Seniors out there. Woo hoo!RUKIdding , October 17, 2017 at 4:44 pm
There is really two issues:
1) for those whom age discrimination in employment is hitting in their 50s or even younger, before anyone much is retiring, it needs to be combatted
2) eventually (sometimes in their 60's and really should be at least by 65) people ought to be allowed to retire and with enough money to not be in poverty. This work full time until you drop garbage is just that (it's not as if 70 year olds can even say work 20 hours instead, no it's the same 50+ hours or whatever as everyone else is doing). And most people won't live that much longer, really they won't, U.S. average lifespans aren't that long and falling fast. So it really is work until you die that is being pushed if people aren't allowed to retire sometime in their 60s. Some people have good genes and good luck and so on (they may also have a healthy lifestyle but sheer luck plays a large role), and will live far beyond that, but averagescocomaan , October 17, 2017 at 11:06 am
Agree with you about the 2 issues.
Working past 65 is one of those things where it just depends. I know people who are happily (and don't "really" need the money) working past 65 bc they love their jobs and they're not taking a toll on their health. They enjoy the socialization at work; are intellectually stimulated; and are quite happy. That's one issue.
But when people HAVE TO work past 65 – and I know quite a few in this category – when it starts taking a toll on their health, that is truly bad. And I can reel off several cases that I know of personally. It's just wrong.
Whether you live much longer or not is sort of up to fate, no matter what. But yes, if work is taking a toll on your heath, then you most likely won't live as long.HotFlash , October 17, 2017 at 4:19 pm
In January, economists from MIT published a paper, entitled Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation, which showed that there is absolutely no relationship between population aging and economic decline. To the contrary, population aging seems to have been associated with improvements in GDP per capita, thanks to increased automation:
From the cited article.
I don't know why it never occurred to me before, but there's no reason to ditch your most knowledgeable, most skilled workers toward the eve of their careers except if you don't want to pay labor costs. Which we know that most firms do not, in their mission for profit for shareholders or the flashy new building or trying to Innuhvate .
There's a myth that innovation comes from the 20 something in their basement, but that's just not the case. Someone who has, for instance, overseen 100 construction projects building bridges needs to be retained, not let go. Maybe they can't lift the sledge anymore, but I'd keep them on as long as possible.
Good food for thought! I enjoyed this piece.fresno dan , October 17, 2017 at 11:08 am
There's a myth that innovation comes from the 20 something in their basement, but that's just not the case.
Widely held by 20 somethings. Maybe it's just one of those Oedipus things.Disturbed Voter , October 17, 2017 at 1:26 pm
1. Not being willing to pay enough to skilled workers, which includes not being willing to pay them to relocate
2. Not being willing to train less skilled workers, as companies once did as a matter of course
3. older workers have seen all the crap and evil management has done, and is usually in a much better position than young less established employees to take effective action against itJeremy Grimm , October 17, 2017 at 2:25 pm
This. Don't expect rational actors, in management or labor. If everyone was paid the same, regardless of age or training or education or experience etc then the financial incentives for variant outcomes would decrease. Except for higher health costs for older workers. For them, we could simply ban employer provide health insurance then that takes that variable out of the equation too. So yes, the ideal is a rational Marxism or the uniformity of the hive-mind-feminism. While we would have "from each according to their ability, to each according to their need" we will have added it as an axiom that all have the same need. And a whip can encourage the hoi polloi to do their very best.BoycottAmazon , October 17, 2017 at 11:16 am
Fully agee! To your list I would add a corollory to your item #3 -- older workers having seen all the crap and evil management has done are more likely to inspire other employees to feel and act with them. -- This corollory is obvious but I think it bears stating for emphasis of the point.
I believe your whole list might be viewed as symtoms resulting from the concept of workers as commodity -- fungible as cogs on a wheel. Young and old alike are dehumanized.
The boss of the branch office of the firm I last worked for before I retired constantly emphasized how each of us must remain "fungible" [he's who introduced me to this word] if we wanted to remain employed. The firm would win contracts using one set of workers in its bids and slowly replace them with new workers providing the firm a higher return per hour billed to the client. I feel very lucky I managed to remain employed -- to within a couple of years of the age when I could apply for Medicare. [Maybe it's because I was too cowed to make waves and avoided raises as best I could.]
[I started my comment considering the idea of "human capital" but ran into trouble with that concept. Shouldn't capital be assessed in terms of its replacement costs and its capacity for generating product or other gain? I had trouble working that calculus into the way firms treat their employees and decided "commodity" rather than "capital" better fit how workers were regarded and treated.]Jim Haygood , October 17, 2017 at 1:35 pm
"skills vs. demand imbalance" not labor shortage. Capital wants to tip the scale the other way, but isn't willing to invest the money to train the people, per a comment I made last week. Plenty of unemployed or under-employed even in Japan, much less Oz.
Keeping the elderly, who already have the skills, in the work place longer is a way to put off making the investments. Getting government to tax the poor for their own training is another method. Exploiting poor nations education systems by importing skills yet another.
Some business hope to develop skills that only costs motive power (electric), minimal maintenance, and are far less capital intensive and quicker to the market than the current primary source's 18 years. Capitalism on an finite resource will eat itself, but even capitalism with finite resources will self-destruct in the end.Arthur Wilke , October 17, 2017 at 1:44 pm
Importantly, the chart labeled as Figure 2 uses GDP per capita on the y-axis.
Bearing in mind that GDP growth is composed of labor force growth times productivity, emerging economies that are growing faster than the rich world in both population and GDP look more anemic on a per capita basis, allowing us rich country denizens to feel better about our good selves. :-)
But in terms of absolute GDP growth, things ain't so bright here in the Homeland. Both population and productivity growth are slowing. Over the past two-thirds century, the trend in GDP groaf is relentlessly down, even as debt rises in an apparent attempt to maintain unsustainable living standards. Chart (viewer discretion advised):
Van Onselen doesn't address the rich world's busted pension systems. To the extent that they contain a Ponzi element premised on endless growth, immigration would modestly benefit them by adding new
victimsworkers to support the greying masses of doddering Boomers.
Will you still need me
Will you still feed me
When I'm sixty-four?
-- The BeatlesYves Smith Post author , October 17, 2017 at 4:54 pm
There's been an increase in the employment of older people in the U.S. in the U.S. population. To provide a snapshot, below are three tables referring to the U.S. by age cohorts of 1) the total population, 2) Employment and 3) employment-population ratios (percent).based on Bureau of Labor Statistics weightings for population estimates and compiled in the Merge Outgoing Rotation Groups (MORG) dataset by the National Bureau of Economic Research (NBER) from the monthly Current Population Survey (CPS).
The portion of the population 16 to 54 has declined while those over 54 has increased.
1. Percent Population in Age Cohorts: 1986 & 2016
1986 2016 AGE
18.9 15.2 16-24
53.7 49.6 25-54
12.2 16.3 55-64
9.4 11.2 65-74
5.8 7.7 75 & OVER
100.0 100.0 ALL
The portion of the population 16 to 54 employed has declined while the portion over 54 has increased..
2 Percent Employed in Age Cohorts: 1986 & 2016
1986 2016 AGE
18.5 12.5 16-24
68.4 64.7 25-54
10.4 16.9 55-64
2.3 4.8 65-74
0.4 1.0 75 & OVER
100.0 100.0 ALL
The employment-population ratios (percents) show significant declines for those under 25 while increases for those 55 and above.
3. Age-Specific Employment Population Ratios (Percents)
1986 2016 AGE
59.5 49.4 16-24
77.3 77.9 25-54
51.8 61.8 55-64
14.8 25.9 65-74
3.8 7.9 75 & OVER
60.7 59.7 ALL
None of the above data refute claims about age and experience inequities. Rather these provide a base from which to explore such concerns. Because MORG data are representative samples with population weightings, systematic contingency analyses are challenging.
In the 30 year interval of these data there have been changes in population and employment by education status, gender, race, citizenship status along with industry and occupation, all items of which are found in the publicly available MORG dataset.
AWArthur Wilke , October 17, 2017 at 6:27 pm
I think you are missing the point. Life expectancy at birth has increased by nearly five years since 1986. That renders simple comparisons of labor force participation less meaningful. The implication is that many people are not just living longer but are in better shape in their later middle age. Look at the dramatic drop in labor force participation from the 25-54 age cohort v. 55 to 64. How can so few people in that age group be working given that even retiring at 65 is something most people cannot afford? And the increase over time in the current 55=64 age cohort is significantly due to the entry of women into the workplace. Mine was the first generation where that became widespread.
The increase in the over 65 cohort reflects desperation. Anyone who can work stays working.paul , October 17, 2017 at 1:54 pm
Even if life-expectancy is increasing due to improved health, the percentage of those in older cohorts who are working is increasing at an even faster rate. If a ratio is 6/8 for a category and goes up to 10/12 the category has increased (8 to 12 or 50%) and the subcategory has increased (6 to 10 i or 67% and the ratios go from 6/8 or 75/100 to 10/12 or 83.3/100)
I assume you are referencing the employment-population (E/P) ratio when noting "the dramatic drop in labor force participation from the 25-54 age cohort v. 55 to 64." However the change in the E/P ratio for 25-54 year olds was virtually unchanged (77.3/100 in 1986 to 77.9/100 in 2016) and for the 55-64 year olds the E/P ratio INCREASED significantly, from 51.8/100 in 1986 to 61.8/100 in 2016.
You query: "How can so few people in that age group be working given that even retiring at 65 is something most people cannot afford?" That's a set of concerns the data I've compiled cannot and thus cannot address. It would take more time to see if an empirical answer could be constructed, something that doesn't lend itself to making a timely, empirically based comment. The data I compiled was done after reading the original post.
You note: ". . . ;;[T] the increase over time in the current 55-64 age cohort is significantly due to the entry of women into the workplace." Again, I didn't compute the age-gender specific E/P ratios. I can do that if there's interest. The OVERALL female E/P ratio (from FRED) did not significantly increase from December 1986 ( 51.7/100) to December 2016 (53.8/100).
Your write: "The increase in the over 65 cohort reflects desperation. Anyone who can work stays working." Again, the data I was using provided me no basis for this interpretation. I suspect that the MORG data can provide some support for that interpretation. However, based on your comments about longer life expectancy, it's likely that a higher proportion of those in professional-middle class or in the upper-middle class category Richard Reeves writes about (Dream Hoarders) were able and willing to continue working. For a time in higher education some institutions offered incentives for older faculty to continue working thereby they could continue to receive a salary and upon becoming eligible for Social Security draw on that benefit. No doubt many, many vulnerable older people, including workers laid off in the wake of the Great Recession and otherwise burdened lengthened their or sought employment.
Again the MORG data can get somewhat closer to your concerns and interests, but whether this is the forum is a challenge given the reporting-comment cycle which guides this excellent site.Livius Drusus , October 17, 2017 at 3:20 pm
Institutional memory (perhaps, wisdom) is a positive threat to institutional change (for the pillage).
In my experience,those in possession of it are encouraged/discouraged/finally made to go.
The break up of British Rail is a salient,suppurating example.
The break up of National Health Service is another.
It would be easy to go on, I just see it as the long year zero the more clinical sociopaths desire.flora , October 17, 2017 at 7:42 pm
I don't understand how the media promotes the "society is aging, we need more immigrants to avoid a labor shortage" argument and the "there will be no jobs in the near future due to automation, there will be a jobs shortage" argument at the same time. Dean Baker has discussed this issue:
In any event, helping to keep older workers in the workforce can be a good thing. Some people become physically inactive after retirement and their social networks decline which can cause depression and loneliness. Work might benefit some people who would otherwise sink into inactivity and loneliness.
Of course, results might vary based on individual differences and those who engaged in hard physical labor will likely have to retire earlier due to wear and tear on their bodies.TarheelDem , October 17, 2017 at 5:24 pm
Increase in life expectancy is greatly influenced by a decrease in childhood mortality. People are living longer because they aren't dying in large numbers in childhood anymore in the US. So many arguments that start out "we're living longer, so something" confuse a reduction in childhood mortality with how long one can expect to live to in old age, based on the actuarial charts. Pols who want to cut SS or increase the retirement age find this confusion very useful.
" Life expectancy at birth is very sensitive to reductions in the death rates of children, because each child that survives adds many years to the amount of life in the population. Thus, the dramatic declines in infant and child mortality in the twentieth century were accompanied by equally stunning increases in life expectancy. "
http://www.pbs.org/fmc/timeline/dmortality.htmJBird , October 17, 2017 at 5:57 pm
I've noticed ever since the 1990s that "labor shortage" is a signal for cost-cutting measures that trigger a recession. Which then becomes the excuse for shedding workers and really getting the recession on.
It is not just older workers who are spare. There are other forms of discrimination that could fall by the wayside if solving the "labor shortage" was the sincere objective.SpringTexan , October 17, 2017 at 6:59 pm
Often productively, sales, and profits decrease with those cost cuttings, which justified further cuts which decreases productivity, sales, and profits which justifies
It's a pattern I first noticed in the 1990s and looking back in the 80s too. It's like some malevolent MBAs went out and convinced the whole of American middle and senior business management that this was the Way to do it. It's like something out of the most hidebound, nonsensical ideas of Maoism and Stalinism as something that could not fail but only be failed. It is right out of the Chicago Boys' economics playbook. Thirty-five years later and the Way still hasn't succeeded, but they're still trying not to fail it.JBird , October 17, 2017 at 5:42 pm
Love your reflections. Yeah, it's like a religion that they can't pay more, can't train, must cut people till they are working to their max at ordinary times (so have no slack for crises), etc. etc., and that it doesn't work doesn't change the faith in it AT ALL.Dan , October 17, 2017 at 7:12 pm
This is ranting, but most jobs can be done at most ages. If want someone to be a SEAL or do 12 hours at farm labor no of course not, but just about everything else so what's the problem?
All this "we have a skilled labor shortage" or "we have a labor surplus" or "the workers are all lazy/stupid" narratives" and "it's the unions' fault" and "the market solves everything" and the implicit "we are a true meritocracy and the losers are waste who deserve their pain" and my favorite of the "Job creators do make jobs" being said, and/or believed all at the same time is insanity made mainstream.
Sometimes I think whoever is running things are told they have to drink the Draught of UnWisdom before becoming the elites.flora , October 17, 2017 at 7:46 pm
So I'm a middle aged fella – early thirties – and have to admit that in my industry I find that most older workers are a disaster. I'm in tech and frankly find that most older workers are a detriment simply from being out of date. While I sympathize, in some cases experience can be a minus rather than a plus. The willingness to try new things and stay current with modern technologies/techniques just isn't there for the majority of tech workers that are over the hill.
Well, if you're lucky, your company won't replace you with a cheaper HiB visa holder or outsource your job to the sub-continent before you're 40.
Oct 16, 2017 | discussion.theguardian.com
cognitivedissonance1 , 15 Oct 2017 13:25Nothing new here, C Wright Mills, the US state as a plutocracy , government by the few , said it all fifty years ago , especially the economic oligarchsimipak -> NoBets , 15 Oct 2017 13:21
http://plutocratsandplutocracy.blogspot.co.uk/2016/05/the-power-elite.htmlI would again point to Plato. Those whose affluence exceeds the critical threshold stagnate. They have no need to work, no need to hold anything as valuable, they contribute nothing and take everything.Viddyvideo , 15 Oct 2017 13:19
What is the point in being so rich? There's nothing you can gain from it, other than bank account pinball.
The purpose of being rich is to enable you. It is the only purpose. Once you are fully enabled, money has no value.
Those who are poor can't afford the tools to work well, the education/training needed, anything by which they could better themselves and be upwardly mobile.
There are some who are poor by choice. Voluntary hermits are common enough. They're not included in here because they're self-sufficient and have the tools they need so fall out of scope.
The middle band, where prone work the best, function the best, are mentally and physically the best, is very very big. Nothing stops you cramming society into there because they've plenty of room to stretch out.
But people always want to improve. No big. Make tax follow a curve, so that you always improve but the game gets harder not easier. Would you play a computer game where level 100 was easier than level 1? No, you'd find it boring. As long as it's a single curve, nobody gets penalized.
You now get to play forever, level billion is better than level million is better than level thousand, but it's asymptotic so infinite improvement never breaks outside the bounds.
"Asymptotic" is a word that meets your objection AND my rebuttal. You do not have to have either a constant, infinity or hard ceilings. Leave straight lines to geometers and enter the world of inflection points.