Archive for February, 2014

Government spying and corporate spying

February 28, 2014

spy-vs-spy-without-bombs-775529I’ve been told that I should not complain about secret NSA, CIA and FBI surveillance of the public because corporate surveillance is so much more thorough and detailed.   Google knows more about me than the NSA ever could.

I’ve also been told that I should not complain about corporate spying because any information I yield up through a commercial transaction is the result of a voluntary decision on my part.

I think that the question of whether Big Government or Big Business is the worse problem is, increasingly, a distinction without a difference.

I think government surveillance agencies have access, or soon will get access, to all the information that Google, MasterCard, Barnes & Noble and other corporate entities have about me.  And I think that if I ever were able to create serious problems for a big corporation, they would be able to get access to any files that police and intelligence agencies have.  From the standpoint of those in charge, Big Data will be one seamless whole, and it won’t matter whether a particular datum’s origin is public or private.

ANATOMY OF THE DEEP STATE by Mike Lofgren for Moyers & Company

http://billmoyers.com/2014/02/21/anatomy-of-the-deep-state/

Inequality, austerity are enemies of meritocracy

February 27, 2014

A smart economist named Tyler Cowen has written a book entitled Average Is Over, in which he foresees a world of advanced technology in which maybe 15 percent of the population will have the ability to keep up and grow rich, while everybody else falls behind.

He said new technology will make the population more legible to the job creators, so that those who have merit will rise more quickly, but those who make bad choices early in their lives will be marked forever.  He has no problem with this because, like many economists, he thinks anything is all right if it is the result of market forces.

I don’t have standing to criticize Cowen’s book because I haven’t read it, but I think that, as a general principle, the greater the degree of inequality and the fewer the openings at the top, the less likely that these openings will be allocated on the basis of merit.  Rather the gatekeepers will first make sure that their families and loved ones are taken care of, and then will look to do favors for those who can do favors in return.

Equality of opportunity entails risk for those at the top, but that risk is minimized when prosperity is widely shared, and people who miss out on one thing have a fair shot at something else.

Which nation’s people are the most satisfied?

February 26, 2014
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Las year researchers from Pew Research Center once again asked a sampling of people from different countries, “Overall, are you satisfied or dissatisfied with the way things are going in our country?”

The map and chart indicate the percentage who answered, “Satisfied.”

The peoples who reported the most satisfaction were the Chinese (85%) and Malaysians (82%) and those who reported the least satisfaction were the Spanish (5%), Italians (3%) and Greeks. (2%).  We Americans were in the middle (31%).

What these surveys measure is not which countries are flourishing the best, but whether life in those countries measures up to expectations, which is different.

Hat tip to Business Insider and Marginal Revolution.

A good question

February 26, 2014

hattip.corrente

Hat tip to Corrente.

http://crooksandliars.com/diane-sweet/35-million-homeless-and-185-million-va

http://www.theguardian.com/society/2014/feb/23/europe-11m-empty-properties-enough-house-homeless-continent-twice

Ukraine in crisis: Recommended links

February 25, 2014

I don’t claim to understand the politics of Ukraine, but I’ve come across some articles on-line that I found enlightening, and maybe you will, too.

EVERYTHING YOU KNOW ABOUT UKRAINE IS WRONG by Mark Ames for PandoDaily.

http://pando.com/2014/02/24/everything-you-know-about-ukraine-is-wrong/

CAREFUL WHAT YOU WISH FOR IN UKRAINE by “Spengler” for Asia Times

http://www.atimes.com/atimes/Central_Asia/CEN-01-240214.html

FASCISM, RUSSIA AND UKRAINE by Timothy Snyder for the New York Review of Books

http://www.nybooks.com/articles/archives/2014/mar/20/fascism-russia-and-ukraine/?insrc=rel

SHOCK OVER UKRAINE by Dmitry Orlov

http://cluborlov.blogspot.com/2014/02/shock-over-ukraine.html

CARNIVAL IN CRIMEA by Pepe Escobar for Asia Times. [Added 2/28/14]

http://www.atimes.com/atimes/Central_Asia/CEN-05-280214.html

James Scott and the Art of Not Being Governed

February 25, 2014

Some time ago I read and admired James C. Scott’s Two Cheers for Anarchism, in which he pointed out how nowadays most Europeans and Americans are overly ready to obey authority.

I also read Scott’s Seeing Like a State, which is about how the modern world has been shaped by the desire of rulers to make their subjects legible, so that they can be more easily taxed, conscripted and controlled, and the disasters that have followed from rulers’ illusion that information is the same as understanding.

I haven’t yet got around to reading his other great book, The Art of Not Being Governed, which is about 100 million people in the uplands of southeast Asia who have successfully escaped the control of governments in the region.  This video is a good preview.

As Scott pointed out, the ungoverned people he studied were not primitives who had failed to catch up with civilization.  Rather they were the descendents of people who centuries before had escaped the control of governments of China, Vietnam, Thailand and other countries.

He noted that only during the last few centuries has it been possible to even argue that there is a  net benefit to being under the jurisdiction of a government.  Prior to that you were better off being a free hunter-gatherer.  All government did was tax you, conscript you, enslave you and possibly provide some protection for other governments.

[Added later]  I did eventually finish reading The Art of Not Being Governed.  Click on the link for my review.

Would a smaller Army mean a smaller mission?

February 24, 2014

The Obama administration wants to shrink the U.S. Army to the smallest number of troops since prior to World War Two, according to the New York Times.

But, in my opinion, this does not necessarily mean a reduction in the number of U.S. military operations overseas.  I think it means a greater reliance of flying killer drones and Special Operations assassination teams.  I would be happy to be proved wrong about this.

The U.S. Army is already on track to reduce the number of soldiers from the post 9/11 peak of 570,000 to 490,000.  The New York Times reported that Defense Secretary Chuck Hagel announced plans to further reduce the Army’s forces to between 440,000 and 450,000.  This is ample to defend the U.S. homeland, he said.

Hagel also announced plans to eliminate an Air Force wing whose primary mission is to fight enemy tanks — a vital capabililty in case of a Soviet invasion of western Europe, but less likely to be needed now.

Special Operations and cyberwarfare will be exempt from budget cuts, and the Navy will keep its 11 aircraft carriers.

I would be glad if this signified the Obama administration and the Pentagon generals have adopted more modest military goals.  But what I suspect it means is that the new policy is a recognition that U.S. ground forces cannot cope with insurgencies, and that the quest for global military domination will be pursued by other means.

http://www.nytimes.com/2014/02/24/us/politics/pentagon-plans-to-shrink-army-to-pre-world-war-ii-level.html?_r=0

http://pando.com/2014/02/20/the-war-nerd-driverless-trucks-cant-mask-the-us-militarys-problem-with-insurgent-warfare/

Why the U.S. can afford to raise minimum wage

February 24, 2014

fat-cat-index-minimum-wage

The U.S. minimum wage has failed to keep up with inflation and productivity, and adjusted for inflation (which you always should do) is lower than it has been in the past.  So there is no good reason to fear that current proposals to increase minimum wage will result in higher unemployment.

The following link has good background information.

http://www.addictinginfo.org/2013/10/05/federal-minimum-wage-productivity/

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Supply, demand and minimum wage

February 24, 2014

One of the big arguments against raising the minimum wage is based on an over-simple understanding of the law of supply and demand  — that if employers have to pay higher wages, they’ll hire fewer workers.

If that were true, then the long-term decline in the minimum wage and in median workers’ wages (adjusted for inflation, which you should always do) would have resulted in full employment.  Obviously this hasn’t happened.

A rational employer will hire as many workers as necessary for the profitable operation of the business, and no more.  The law of supply and demand sets limits.  The employer will not pay so much that he can’t operate profitably, nor so little that nobody will work for him.  But, as is shown by the difference between Costco and Walmart, there is a broad range between those two limits.

Suppose I have a franchise to operate a McDonald’s restaurant.  I would not raise wages to the point where higher costs forced me to charge more for a hamburger than the Burger King restaurant across the street.  But if the minimum wage was raised for both of us, we could pay higher wages and still be on a level playing field.

In theory, minimum wage could be raised to the point where I charged more for hamburger than people were willing to pay.  But there is no evidence that this has ever happened with minimum wage in the United States.

One economist, for example, compared employment in adjoining counties of adjoining states with different state minimum wages.  There was no evidence of any difference in unemployment rates or job availability.

A higher minimum wage could have a positive effect on employment.  If low-wage workers have more money to spend, there is a greater demand for goods and services, and could result in new hiring.

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Jenn’s Words: “Living in poverty is like being punched in the face over and over and over on a daily basis. “

February 24, 2014

Poor as Folk

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Thank you to Jenn for sharing her personal story of living in poverty right now….

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Today, I did something I never thought I’d do. I yelled at my son for being hungry. Oh sure, there are many parents nodding in agreement because they’ve done the same thing. Many have yelled at their kids for asking for one more snack right before dinner was served or for wanting to eat junk food out of boredom. That’s not why I yelled. I yelled because I didn’t have extra food to give him and I was taking my frustration out on him. He wasn’t doing anything wrong. He’s just a kid, a 7 year old who is full of energy and constantly growing. Of course he’s hungry often. That’s what kids do. However, I didn’t have enough food for anyone to have extras. Everything has to be rationed out over a week…

View original post 4,062 more words

Science and the sense of beauty

February 23, 2014

beauty

Click on xkcd for more Randall Munroe cartoons

Russia’s stake in Ukraine

February 22, 2014

3 Gas pipelines west

gaspipelines.russia.europe

I try to resist the American tendency to choose sides in foreign conflicts I don’t understand.   But I can’t help but sympathize with Ukrainians who want their country to be free of Russian influence.

I know the history of how Joseph Stalin killed millions of Ukrainians, including targeted killings and deportations of prosperous farmers (kulaks) and an intentional famine to force Ukrainians into government-controlled collective farms.  I remember the happiness of my Ukrainian-American acquaintances in Rochester, NY, when the Soviet Union broke up and Ukraine became a sovereign nation.

But the maps above show why the Russian government would not tolerate a hostile Ukraine.   Russia cannot compete as an industrial nation with the advanced economies of Europe, North America and the Far East.   Its economy is dependent on exports of oil and gas from Siberia and Central Asia.  The maps show how many of Russia’s vital gas pipelines to Russia go through Ukraine.

I believe that, as a general rule with very few exceptions, the United States government should not interfere in the internal conflicts of foreign nations.  I think interference in the Ukrainian conflict would be especially unwise because it would be a challenge to the vital interests of the only country in the world that, because of its nuclear arsenal, has the capability of destroying the United States.

My father always used to say that you should never start a fight you weren’t prepared to finish.  There’s something worse than that, which is to encourage others to start fights they can’t finish in the false expectation that you will help them.  I remember how in 1956 the Voice of America and Radio Free Europe encouraged the Hungarians to rise up against their Soviet occupiers (I was in basic training in the U.S. Army at the time) when the U.S. government had no intention of coming to their aid and risking a nuclear confrontation with the USSR.

I thought then that it was shameful to give the Hungarian Freedom Fighters the false hope that Americans would come to their aid.  I think it would be equally shameful to give the same false hope to any of the Ukrainian factions.

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I think blog posts by Rod Dreher and Daniel Larison of The American Conservative (both of them Eastern Orthodox Christians, by the way) show good sense.  Dreher is noteworthy, too, for the excellent comment threads on his posts.

http://www.theamericanconservative.com/dreher/ukraine-dying-in-vain-freedom/

http://www.theamericanconservative.com/larison/the-dangerous-desire-to-take-sides-in-other-nations-conflicts/

One-legged bicycle messenger in New York

February 22, 2014

This video is from 2006.  I’d like to think this guy is still around.

Click on The Hard Math of Two Wheels and One Pedal for background by Dan Barry in the New York Times.

Hat tip to kottke.org.

On being afraid to speak like a free American

February 21, 2014

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When I was reporting on business for my local newspaper in the 1980s and 1990s, I encountered a lot of people who were afraid to speak their minds and be quoted by name.

They weren’t afraid of the FBI, the CIA or any governmental or police agency.  They were afraid of employers — not just their own employer, but any potential future employer.  As one said, “I don’t want to be known as a bad employee.”

If you had to choose between evils, an oppressive government is worse than an oppressive employer.  In the worst case, the former has the power to take away your life and freedom, while the latter has only the power to take away your livelihood.  But a (comparatively) lesser evil can still be a great evil.

http://www.businessweek.com/articles/2012-08-03/where-free-speech-goes-to-die-the-workplace

Almost all the people I ran into in those days who were unafraid to speak like free Americans fell into one of the following categories.

  • Tenured college professors.
  • Civil servants
  • Union members with strong unions and good contracts
  • Independent professionals such as physicians, lawyers and accountants, not employed by a larger firm.
  • Independent craft workers such as plumbers, electricians or handymen, not employed by a larger firm.
  • Independent business owners not dependent on a single customer.

It might not be a coincidence that the proportion of people in all these categories is declining.

A letter from Ukraine

February 21, 2014

I don’t claim to understand what is going on in Ukraine, but I thought the following was interesting, especially the conclusion, the text of a letter from the vice rector of Ukrainian Catholic University.

http://www.theamericanconservative.com/dreher/ukraine-civil-war-revolution

The rise of the surveillance workplace

February 20, 2014

spying

Increasing numbers of American businesses are using NSA-type surveillance technology to monitor employee behavior on a minute-by-minute basis.  The data gathered by these monitors will be used to create algorithms for judging in advance which employees will be productive and which won’t.

One striking example of this technology is the Hitachi Business Microscope, a device that resembles an employee name tag.  An HBM can generate data on how an employee spent their day, when they stood up and sat down, when they nodded their heads, waved their arms, pointed their fingers or stretched, who they talked to and in what turn of voice, when they went to the bathroom or coffee machine and how long they spent doing it.

Hitachi says this data can be used to maximize “employee happiness.”  I can think of less benign potential uses.

The HBM is part of a new industry of manufacturers and consultants that purport to use surveillance technology to improve employee productivity.

I question how much improvement will actually take place.  Data is only useful to those who know how to interpret it correctly.  Having more data than you can comprehend is counter-productive.

What the new surveillance technology will do is to increase managerial control, which most managers fail to realize is an entirely different thing.

Developments like this make me glad I’m 77 years old and retired.   The great thing about being a newspaper reporter during the 40 years I worked in journalism was that you were free to do your job as you saw fit, and were judged by results.

I remember talking to some machinists for Eastman Kodak Co. in the late 1970s, who marveled that I in my job as a newspaper reporter was not only free to go to the bathroom without asking permission, but also to get up at will and go to the vending machine for cup of coffee.

Later on I was thankful not to be a telephone operator, telemarketer and customer service representative, who was monitored on whether he or she followed scripts and completed calls within an allotted time, or a data processor, whose work was measured keystroke by keystroke.

But the new technology takes workplace surveillance to a whole new level.   It is like the difference between Tsarist Russia and Soviet Russia.

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The old American myth and the new one

February 20, 2014

When I was growing up, most Americans believed that one of the things that made our country exceptional was “the American standard of living” — that Americans of all social classes were better off than their counterparts elsewhere, and that is why everyone would want to move to the USA if they could.

Now we’re adopting a new belief — that what makes our country exceptional, at least compared t is that we Americans are tough and therefore don’t need job security, guaranteed medical care or all the other things that cushion their lives.   However, if the Europeans follow their present austerity course, we may not be exceptional in that respect, either.

The opposite of what America does

February 19, 2014

opposite

We Americans have a lot of things to be proud of, but we hurt ourselves when our national pride prevents us from learning from the best practices of other nations.

Hat tip to Hullabaloo.

The money illusion

February 18, 2014

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When I was in high school (around 1950), an income of $5,000 a year was considered barely enough to get by on, $10,000 a Cyear was good money and $50,000 a year was great wealth.

So when college graduates who get $50,000-a-year jobs and still complain, their elders tend to be unsympathetic.  This is what the great economist John Maynard Keynes called “money illusion.”

As Kevin Drum of Mother Jones pointed out, $50,000 a year today is equivalent to $18,000 a year in 1980 and $6,000 a year in 1960 in terms of what the money can buy.

When inflation is low, as it is now, it is natural to think of it as nonexistent, but this is a mistake.  Even an inflation rate of 2 to 3 percent a year can erode income (and savings) more than you might think because of compounding.  You don’t subtract $2 to $3 from $100 every year, you subtract 2 to 3 percentage points of each year’s lower sum.  Inflation is like compound interest, except in reverse.

LINKS

Compound inflation is probably higher than you think by Kevin Drum for Mother Jones.

The wage is too damn low by Duncan Black, aka Atrios, on his Eschaton web log.

Why you should always adjust for inflation

February 18, 2014

household-income-monthly-median-growth-since-2000

This chart shows why no economic statistic is valid unless an adjustment is made to allow for the effects of inflation.

If you just look at income in terms of dollars, the American middle class has not done all that badly in the 21st century.

If you look at what those dollars will buy (setting aside the question of whether the CPI underestimates the true cost of living), the figures tell a different story.

For the context of the chart, click on Rising Inequality: Recovery Driven Almost Entirely by the Rich by “Gaius Publius” for the Center for Media and Democracy

Amazon, the Walmart of the Internet

February 17, 2014

615_Bezos_Amazon_Kindle_Reuters

Amazon is well on its way to monopolizing book distribution.  Its strategy is like Walmart’s.

First you gain an initial advantage through economies of scale and introducing new efficiencies.  So far, so good.  That is how free enterprise is supposed to operate.

Then you leverage your initial advantage in the marketplace to squeeze suppliers and lower your costs.  This enables you to keep prices low so as to knock out small competitors and keep new competitors from emerging.

Meanwhile you treat your rank-and-file employees like dirt.

The parallel is not complete, because the current Walmart owners are destroying their company through their short-sighted greed and stupidity, while Jeff Bezos, the founder and CEO of Amazon, may be greedy but he is anything but short-sighted and stupid.

And he is just getting started.  According to one analyst, 93 percent of Amazon’s $75 billion in annual revenues come from products other than books.

George Packer, writing in the New Yorker, says that 50 to 60 percent of the price of a book sold through Amazon goes to Amazon itself.  Another 10 to 15 percent goes for sales, warehousing and shipping.  What’s left over covers printing, editing, publicity and, oh yes, royalties to the author and, oh yes, any profit the publisher may earn.

This is new.  Historically retailers got 30 to 40 percent of the price of a book.

It is illegal for retailers to demand special discounts from publishers, but, according to Packer, Amazon gets around that by charging “cooperative promotion fees.”   Amazon charges publishers this fee for placement of a book title on its page.  Most of the ranking of books on Amazon’s lists are determined by these fees.  The few publishers who have been brave enough to refuse to pay this fee have found there is no longer a “buy” button on Amazon’s page.

“The only point at which Bezos enters the chain is to take all the money and the e-mail address of the buyer,” Colin Robinson, a publisher, told Packer.  “There’s an entire community of people and Bezos stands in the middle and collects the money.”

While Amazon offers bargain prices, its squeeze on publishers is bad for literature in the long run.  Bezos seeks to transition from physical books to digital books, from which Amazon has 90 percent market share.  If traditional book publishing dies out, Amazon will step into the gap, with book selection based on focus groups, surveys and computer algorithms rather than editors’ judgments of literary value.

Packer reported that  Bezos doesn’t care about books as such.  He started Amazon (named for a river into which all things flow) in 1994 because he had vision enough to foresee the importance of Internet marketing, and he chose books as his entry point because they are “easy to ship and hard to break.”  Now he uses the information on customers he gained through book selling to market a wide array of products.

The saving grace of a well-ordered free enterprise system is that when big business executives overreach themselves, there is an opportunity for a smart entrepreneur to jump into the gap they leave.  Such is Colin Robinson, who has started a publishing firm called OR Books, which bypasses Amazon and sells directly to consumers.  OR Books gives up sales but earns a higher profit which, presumably, can be shared with the author.

Robinson is able to stay in business because of Net Neutrality—the law that says Internet service providers have to provide service to all customers on the same terms.  There’s currently a legislative drive to abolish Net Neutrality (and some say the proposed Trans Pacific Partnership Agreement has an anti-Net Neutrality provision).  If that were to happen, dominant businesses such as Amazon could squeeze out small competitors by demanding special terms from IPPs, just as Amazon does with publishers.

Another public policy favorable to Amazon is anti-trust policy.  Historically anti-trust laws were directed against “the curse of bigness.”  But in the Carter-Reagan years, policy-makers decided that it was all right for a company to dominate its market if there was some benefit to consumers.  The problem with this reasoning is that the benefit to consumers is likely to last only so long as the dominant company has effective competition.  Without competition, the benefits of efficiency and economies of scale don’t necessarily flow to consumers.

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Click on Cheap Words: Is Amazon Bad for Books? to read the whole article by George Packer in the New Yorker.  It’s long, but packed with good information.

Click on a review of Brad Stone’s The Everything Store by Deborah Friedell for The London Review of Books for more.  Her review has additional good information that’s not in the Packer article.

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The case against labor unions

February 16, 2014

caseagainstunions

I wonder which of these arguments convinced workers at a Volkswagen plant in Tennessee to vote against being represented by the United Auto Workers, even though management had no objection to the union.  Or maybe the workers accepted the argument that union representation would kill Tennessee’s low-wage strategy for industrial development.

Click on Anti-Union Voce Will Kill New Tennessee Production Line by Moon of Alabama and The Completely Baffling Tale of the Tennessee Auto Workers by Charles Pierce of Esquire for background.

Also, Auto union loses historic election at Volkswagen plant in Tennessee by Lydia Depillis of the Washington Post. [added 2/17/14]

Also, A Titanic Defeat by Eric Loomis for Lawyers, Guns and Money. [added 2/19/14]

Click on Leftycartoons for more Barry Deutsch cartoons.

Work, play and the art of living

February 16, 2014

artoflivingIt’s wise to choose a vocation you love, and good to be in a position to be able make that choice.   In fact, my idea of a utopian society is one in which everyone is in a position to do what they love.

Click on Work and Play on ZEN PENCILS for more.

How to make public higher education free to all

February 15, 2014

Only about 10 percent of the money that’s spent on institutions of higher education actually goes to educating students, according to Robert Samuels, president of the American Federation of Teachers at the University of California.

The rest goes to athletic programs, hospitals, medical schools, industrial and government research and other programs not related to instruction.

He said that if priorities are redirected, it would be possible to provide free public higher education to all qualified students without raising taxes or increasing spending

He said there should be federal standards for universities receiving government aid, including a maximum number of large classes, a minimum percentage of full-time faculty and a requirement that at least 50 percent of state and federal aid be directed to instruction of undergraduates.  He also would take away tax breaks for college expenses and redirect that money into making college education free to all.

Without knowing the details of what he proposes. I think this is the direction in which to go.

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How to peel a head of garlic in minus 10 seconds

February 15, 2014

Hat tip to Avedon’s Sideshow.