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A good Friday to you Widdershins!

With Prolix’s laptop giving up the ghost on him and tin cans and string not working well for internet connectivity, Fredster here is going to do a post in his absence.  Prolix has been kind enough to take a post or two for me, so reciprocating is fine with me.  But as one of the tags to the post says, “Not Prolix”, so don’t hold me to that standard…puhleeze!

In some of my readings around the internet I found articles that I thought were interesting and so I bookmarked them for future reference.  I think that will work out just fine today.  This isn’t exactly current events, nor earth shattering, but something I found interesting and perhaps you will also.

* * * *

The topic I want to cover is from Bloomberg Busisnessweek and concerns the auto manufacturing  and auto parts manufacturing companies that have come to some of the southern states and in this case to Alabama.  The piece is subtitled “Cheap Wages, Little Training, Crushed Limbs“.  And that is about right.

Bama’s experiences with the auto manufacturing business began when the state was able to entice Mercedes Benz to build an assembly plant near Tuscaloosa Alabama.  “In 1997…That gleaming M-Class SUV was historic. Alabama, the nation’s fifth-poorest state, had wagered a quarter-billion dollars in tax breaks and other public giveaways to land the first major Mercedes factory outside Germany.”  I don’t know this personally but I’m sure the employees at that plant have decent wages and working conditions because: German company.  And after that initial company, Toyota, Honda and Hyundai opened their own assembly plants in Bama.  The car assembly plants opened in other southern states too; Tennessee and Georgia as examples.  And one reason the plants came was because most of these states are right-to-work states.  U.A.W. ?  Nah, we don’t need no stinkin’ unions here.  And after the car assembly plants, the parts suppliers started opening up in the state.

The parts supplier companies are usually foreign-owned and supply the parts for the assembly plants.  And though the companies may both be from South Korea, there’s no love lost between them.  The assembly plants have contracts with the parts plants and have very fixed quotas on how many widgets for a car those plants must make or they’ll be penalized.  So those suppliers take chances and cut corners, and the corners usually involve worker safety.

Take the case of Regina Elsea.  She had great plans, was going to attend Auburn University with desires to be a pediatrician.  But love called in the form of her kindergarten sweetheart who was a stocker at a local Walmart.  Regina dropped out of school so they both could work to get a place of their own.  She got a job at the Ajin plant which made parts for Hyundai and Kia cars.  Regina was working 12-hour shifts 7 days a week in an effort to go from temporary paying $8.75/hr. to full time permanent with a raise to $10.50/hr.   Here’s what happened to Regina one day:

On June 18, Elsea was working the day shift when a computer flashed “Stud Fault” on Robot 23. Bolts often got stuck in that machine, which mounted pillars for sideview mirrors onto dashboard frames. Elsea was at the adjacent workstation when the assembly line stopped. Her team called maintenance to clear the fault, but no one showed up.

[snip]

After several minutes, Elsea grabbed a tool—on the video it looks like a screwdriver—and entered the screened-off area around the robot to clear the fault herself. Whatever she did to Robot 23, it surged back to life, crushing Elsea against a steel dashboard frame and impaling her upper body with a pair of welding tips. A co-worker hit the line’s emergency shut-off. Elsea was trapped in the machine—hunched over, eyes open, conscious but speechless.

(No one knew how to release the robot)

A team leader raced to get a maintenance worker in the break room.  But the maintenance worker worked in a different part of the plant and wasn’t familiar with this equipment.

When emergency crews arrived several minutes later, Elsea was still stuck. The rescue workers finally did what Elsea had failed to do: locked out the machine’s emergency power switch so it couldn’t reenergize again—a basic precaution that all factory workers are supposed to take before troubleshooting any industrial robot. Ajin, according to OSHA, had never given the workers their own safety locks and training on how to use them, as required by federal law. Ajin is contesting that finding.

An ambulance took Regina to a local hospital and then to a trauma center in Birmingham where she died the next day.  Regina’s mom says she still hasn’t heard a word from Ajin’s owners or senior executives. They sent a single artificial flower to her funeral.

Regina’s isn’t the only horror story involving these supplier companies where the goal is “meet the quota or we lose money or we’ll be penalized”.  Some more examples:

  • A man had worked a 12 hour shift but was summoned to work on a metal press  The press had not been working well all day.  A hole puncher didn’t deploy and then it did…at the wrong time – on his finger. “I saw my meat sticking out of the bottom of my glove,” he says.
  • In 2015, a 33-year-old maintenance worker was engulfed in flames at Nakanishi Manufacturing Corp.’s bearing plant in Winterville, Ga.—after four previous fires in the factory’s dust-collection system.
  • A man working at a plant supplying parts for Mercedes Benz was working cleaning ventilation ducts over dipping pools of acid used to anodize the parts. There were no handrails, gangways or cables. He was working one day cleaning the ducts and “His hands slipped, and he tumbled backward into a vat of sulfuric and phosphoric acid 4 feet deep.”

OSHA (under Obama) began noticing this and cracking down:

The agency cited one year, 2010, when workers in Alabama parts plants had a 50 percent higher rate of illness and injury than the U.S. auto parts industry as a whole. That gap has narrowed, but the incidence of traumatic injuries in Alabama’s auto parts plants remains 9 percent higher than in Michigan’s and 8 percent higher than in Ohio’s. In 2015 the chances of losing a finger or limb in an Alabama parts factory was double the amputation risk nationally for the industry, 65 percent higher than in Michigan and 33 percent above the rate in Ohio.

From David Michaels who headed OSHA under President Obama:

“The supply chain isn’t going just to Bangladesh. It’s going to Alabama and Georgia,” says David Michaels, who ran OSHA for the last seven years of the Obama administration. Safety at the Southern car factories themselves is generally good, he says. The situation is much worse at parts suppliers, where workers earn about 70¢ for every dollar earned by auto parts workers in Michigan, according to the Bureau of Labor Statistics. (Many plants in the North are unionized; only a few are in the South.)

Michaels in a meeting with the car companies themselves said to them:

“I gave them a very strong message: ‘This brings shame on your reputation. American consumers are not going to want to buy cars stained with the blood of American workers,’ ”

Summing all of this up:

When Trump suits and ties are made in Mexico and when Ivanka’s clothes are made in sweat shops in Asia, do we really believe that any of these situations are going to improve?  MAGA indeed.

* * * *

Okay Widdershins I hope this wasn’t too boring or snooze-worthy.  And also I violated Prolix’s 800 word rule by about 400 extra words.  Yikes!  Please take the conservation in any direction you wish.

 

When I’m cooking, I’ve learned if you have the luxury of time, low and slow is the way to go. Earlier in my scotch-addled life, my friends told me of limbo contests where I physically went low and slow. And speaking of my scotch-addled life, low and slow pretty much described my dating habits.

Low and slow is neither the way to run the government nor is it the way to run the economy. It is inconceivable to imagine a budget lower in basic human services than what we saw this week.

Yesterday in watching Dick Prick Mick Mulvaney, the dust ruffle of crazy town, claim that cutting Meals on Wheels is the compassionate thing to do, I’m pretty much convinced we can’t go much lower. As we say around here, we are “next to the belly of a snake in a wagon rut.”

Obviously, Dolt 45 is as dumb as a box of hair mated with some orange zest and Adderall. He could care less what these crazy ideologues do as long as he can continue belching his lies in front of half-empty venues.

So why should he care? He’s got Mulvaney and anime-eyed granny-starver Paul Ryan to shovel the steaming dump Jim DeMint and the Heritage Foundation just took on the country. This budget, which will never pass, is nothing but the greatest hits from 1980s Heritage Foundation. Not even Reagan dared going this low.

When someone has no shame, there just is no limit to the depths they will sink. Given this first fifty days, it won’t be long before we are plumbing the depths of the Mariana Trench.

When it comes to slow things, the economy is troubling. About a year ago, I started paying attention to certain economic indicators believing Hillary was about to inherit a lethargic economy. There are disturbing indicators.

Here is a truism:  Economic expansions never die from old age. The current expansion is seven and half-years old. That is long in the tooth.

Gallup surveys economic confidence and says it is at a historic high. The stock market is at a record high. The economy is still adding jobs. So why am I spending your time on the subject?

We are in a bubble. The confidence and stock market are anticipatory highs. It is not based in value. The highs are based upon a belief in massive Trumpanzee promised corporate tax cuts and the repatriation of $2.1 Trillion in offshore profits. Neither will be invested in expansion, but will be paid out in dividends or in stock buybacks. It will make the 1% even more one-percentier.

Unrelated to this economic giddiness, there are indicators screaming we are heading into another slowdown if not outright recession. Not to bore you, but just a few indicators:

  • Employers are cutting back hours. We are seeing the highest percentage in the decline of hours since the 2008 recession.
  • Tax receipts are down.
  • Retailers are missing their earnings projections.
  • Lending standards have tightened.
  • Job growth at the S&P companies has gone negative.

All of these are warning signs of a slowing economy or impending recession. Any external event could hasten an economic retreat. Perhaps even monkeying around with one-sixth of the economy with an ill-conceived health care plan or a federal budget that would decimate hundreds of thousands of employees could precipitate it. Who knows?

I do know this:  There are very few tricks left in the wheelhouse to combat recession. We will hear tax cuts from this bunch of Neanderthal MAGAbators, but as we have seen time and time again, sloganeering is not economic policy.

We are still paying for the last time we allowed this knuckle-dragging crowd to raid the Treasury with tax cuts, two wars, and unfunded benefit programs. Half of the national deficit is due to giving them the credit card and hoping for the best. Well, we know how that turned out.

Why do I think this is important enough to take your time this morning? From what I saw in the proposed budget, these people are unimaginative at best and stone-cold ignorant at worst. They are uncaring and vindictive. They are politically deaf. Power is a means to an end for them.

The choices represented in their budget were callous and heartless. If the worst happens, their response to an economic downturn will be likewise – callous, heartless, low, and slow. Human suffering will be but a minor inconvenience for a $2.1 Trillion payday. Daddy needs a new Gulfstream 650.

What’s on your mind today?

 

 

Good morning Widdershins.

Last night was another delegate-rich evening on the road toward celebrating the inauguration of “Madam President” – our gal is over halfway there. It’s all about the delegates – not vanity, not messaging, not settling some 1960s dorm argument.  Just in case anyone dares overlook it, this is the first time in our history a woman with scary lady parts is the favored candidate to win a major party’s nomination – that my friends is the definition of progressive.

 

Trump Red

There are some things you never expect to say.  For me, thanking Donald Trump is one of them.  The Donald is a guy who was born in the 20th Century with good old-fashioned 18th Century values.  Those values have laid bare the GOP’s Grand Old Con.

Professor Yoda Krugman explains it this way:

The Trump phenomenon threatens the con the G.O.P. establishment has been playing on its own base. I’m talking about the bait and switch in which white voters are induced to hate big government by dog whistles about Those People, but actual policies are all about rewarding the donor class.

What Donald Trump has done is tell the base that it doesn’t have to accept the whole package. He promises to make America white again — surely everyone knows that’s the real slogan, right? — while simultaneously promising to protect Social Security and Medicare, and hinting at (though not actually proposing) higher taxes on the rich. Outraged establishment Republicans splutter that he’s not a real conservative, but neither, it turns out, are many of their own voters.

Shell gameKlandidate Trump has dared to utter heretofore unspeakable things like, “This country was lied into the Iraq War.”  Amazingly, it appears a third of Republican voters agree with him.  As surprising as it is to wild-eyed neocons, war-mongering interventionism isn’t the flavor of choice for these folks.  These GOP voters would rather spend trillions, not on foreign adventurism, but on infrastructure and the jobs they provide.

Jonathan Chait summed it up in an excellent piece in The New York Magazine. His terse truth:  The Republican Party isn’t racist, but it can’t win without racists.  Chait explains the most repugnant of codependent relationships, that of the GOP and a host of race-baiting segregationists, by saying:

The Republican Party has, for decades, been organized around a stable hierarchy of priorities, the highest of which is to reduce taxes for the wealthiest Americans, i.e., “job creators,” and loosen regulation of business.  Trump’s popularity suggests that maybe average Republicans aren’t maniacally obsessed with shrinking government after all.

What conservative intellectuals fail to acknowledge, in reality, William F. Buckley spent the civil-rights movement mocking Martin Luther King Jr. and defending white supremacy and spent the ’80s defending apartheid in South Africa. [Even the sainted Ronaldus Maximus vetoed anti-apartheid legislation and was overridden by a Republican Senate.]

Trump has also exposed another, equally deep insecurity among right-wing intellectuals: the fear that Fox Newstheir movement appeals to rubes. The conservative movement’s tightening grip over the Republican Party has coincided with its elevation of leaders incapable of explaining their policies cogently like Ronald Reagan, George W. Bush, and Sarah Palin.

The secret fear lying beneath Rubio’s accurate depiction of Trump as a “con artist” is that Republican voters are easy marks. The Republican Party is constructed as a machine: Into one end are fed the atavistic fears of the white working class as grist, and out the other end pops The Wall Street Journal editorial-page agenda as the finished product.

A perfect example of the Republican “con game” is tax policy.  Without mind-buckling precision, here’s the dime store window version.  The Bush tax cuts cost $1.5 Trillion over ten years, but now account for, along with the unpaid for wars, over one-half of the national deficit.  That is our benchmark for comparison.

bush-geddan-aWith all the savings going into the pockets of the very richest Americans and corporations, here are the costs of the various Republican tax plans.  Over ten years, Trump’s plan costs $9.5 Trillion or 6+ Dubyas.  Cruz’s plan costs $8.6 Trillion over the same period or 5+ Dubyas.  Rubio’s plan, the most frugal of the three, would only cost $6.8 Trillion over the next decade or over four times as much as the Dubya tax cuts.

Anyone who believes The Wall Street Journal’s “other end” poop is suffering from something much more pernicious than gullibility; this is not voodoo economics, this is anthrax-laced thermonuclear economics.  It is devastating to our economy and our way of life.  It is a devastation designed and delivered by those who just can’t quit the segregationist rubes who fear “Those Others,” who also just happen to be the very same ones who guarantee tax cuts to the wealthy.

Sorry, but it seems I’ve over-written about the GOP’s Grand Old Con.  I have several other subjects I’ll add tomorrow, but until then, take this conversation in any direction you might like to discuss.

 

Apologies to Carly Simon, but…Carly Simon

We’re so vain, we probably think this economy is about us,
We’re so vain, we bet future swaps this economy is about us,
Don’t we? Don’t we?

A few years ago, when the Chinese economy was booming, politicians said it was an orchestrated plot to take America down.  Now that the Chinese economy is struggling desperately, those same politicians are just as convinced it is – wait for it – a plot to take America down.

The political discourse around this issue is genuinely unhelpful.  Just like Seinfeld’s Soup Nazi, Scott Walker snapped, “No state dinner for Xi,” the Chinese President Xi Jinping scheduled for a formal state visit.  I guess the closest Benihana will have to do.  Given the impetuous inanity passing for policy, here’s what you need to know about the China Syndrome of the Chinese economy in less than 800 words.

Chinese Stock MarketChina’s stock market is relatively small.  It’s mostly mom and pop investors who have borrowed the money to buy stocks – a majority of them don’t have a high school education.  After gaining 140% last year, this year the Shanghai Composite Index has fallen 40% in the face of a tremendous amount of active intervention by the Chinese central government.  It seems as though the Politburo can’t stop the crash.

The reason all these unsophisticated investors got into the stock market was the implicit support of the Chinese Communist Party.  It appears to have been an overly optimistic act of faith in the Chinese Politburo’s economic stewardship.

With an abundance of labor, China bet the farm on being the world’s low-cost manufacturer and assembly line.  Such an economic model is not sustainable for an economy needing to grow at a double-digit multiple to service a burgeoning middle class.  The Chinese government has been notoriously optimistic in its economic forecasts (some say notoriously deceiving).  There are more than a few economists who believe the Chinese economy is on the verge of recession, if not already there.

This is how it happened:  When global demand went kaput in 2008, China decided to focus on massive domestic Empty cityconstruction projects.  There has been a massive, and I do mean massive, overbuild in China with unused stadiums, skyscrapers, and even whole cities.  They sit empty.

Add to this the relocation of 250 million Chinese from rural settings to cities in just twelve years as official state policy.  In essence, this top down policy from the Politburo turns China into a majority urban country in a dozen years.  Put another way, it would be the equivalent of relocating 5 of every 6 Americans in the span of three presidential terms.

Chinese leadership is terrified of political unrest reminiscent of Tiananmen Square.  Without sustained growth at a level sufficient to service a growing middle class, the leadership of China is at a crossroads.  At once they are both risk-willing to try just about anything to thwart economic upheaval and at the same time, risk-averse against any potential calamities resulting from their actions.

Chinese Stone SoldiersThere is a group of millennial Chinese numbering about 300 million – about the size of the total U.S. population.  This group is better educated and likes its taste of the middle class lifestyle.  The Communist Party worries most about this group.  Quelling political unrest in this group would be difficult, almost impossible, because of the nomadic nature of these 300 million workers and their widespread geographic dispersion.

In its simplest terms, the problem is transforming a manufacturing, rural economy into an urban, consumption-based economy in less than a generation.  For perspective, it took Great Britain 200 years, the U.S. 100 years, and Japan 50 years to do the same thing.

As with all instances of massive historical change, there are naysayers within the Chinese system.  China’s top-down, hierarchical structure ensures elites have control over policy and decision-making.  These traditionalists are wary of many of the enacted economic reforms.  This current economic tsunami strengthens traditionalists at the expense of reformers like President Xi Jinping.

How does this affect us?  Throughout history, when absolute control is threatened in China, it retreats back in on itself.  Hibernation of the world’s second largest economy would be the equivalent of a worldwide recession and catastrophic to our economic well-being and the world economy in general.Chinese Stone Soldiers

Even more sobering is this:  Political instability in a country with a standing army of 200 million soldiers and perhaps 3,000 nuclear warheads is indeed a worrisome thing.  This is especially true in a region where China is surrounded by emerging economies – the “if you can’t make it, take it philosophy” would indeed present existential threats.

Again, my apologies to Ms. Simon:  “Instead of clouds in my coffee, clouds in my coffee,” there are clouds on the horizon, clouds on the horizon.

Take the conversation in any direction you might like.

 

 

Last week, the Bush “Hair Apparent” said something quite remarkable.  In talking about the economic needs of workers tethered to a living wage calculated for the 1970s, he said, “Workers need to work more hours.”

Okay, let’s dissect this in the light most favorable to the third Bush in the dynasty hedgerow.  Jeb! (always add the exclamation point to give him a little pizzazz)  said he meant, “More hours should be made available to workers,” as opposed to saying, “Workers were lazy slugabeds and needed to work more hours.”  Whatever exclamation boy!

Even if it was a misspeak, still not good Jeb!  In fact, it demonstrates an even more fundamental lack of understanding of the workforce and workers in general.  Here’s the 411:

  • American workers are the most productive workers on the face of the planet;
  • Since the 1970s, productivity has more than doubled and wages have only increased 13%;
  • Even from 2000 until 2012, productivity increased 25% and wages have actually receded – I’m repeating this for the appropriate amount of emphasis, from 2000 until 2012, wages have actually receded while productivity increased by one-quarter;
  • If wages had increased at the same rate as productivity, the current minimum wage would be $22/hour; and
  • Working people now take home the lowest share of total corporate income that’s been recorded since 1950.

Here’s a chart explaining the great parting of the ways between productivity and real earnings:

Productivity and Average Real Earnings

 

Here’s another one depicting productivity, the average income of the 1%, and average overall wages:

Productivity and Average income since 1979

Finally, this last one shows where the great chasm began:

Productivity and Average income of top one percent

 

The other thing about this dust-up and its utter lack of understanding is this:  People who are working part-time for the minimum wage don’t just work one job.  They work two and sometimes three jobs to pay the bills.  As Robert Reich says, “Part-time workers work sixty to seventy hours a week making them almost double full-timers.”  So the answer under the Bush beans-for-brains theory is, “Let’s just change the calendar and add a day – eight days a week and the plebeians can afford the electricity to run their luxury microwaves.  Long live the plutocrats!”  (Another appropriate use of an exclamation point is after the word plutocrat!)

The really sad thing is this – it isn’t the gaffe, or the misunderstanding of the labor market, or the failure to grasp simple economics – it is the abject failure to understand or offer even a cursory acknowledgement that trickle-down economics is a bust – no bueno – territory reserved for turds in the punch bowl!  Trickle down, supply side economics has been harmful and counterproductive to the entire economy, not just minimum wage workers, but wage earners throughout the economic spectrum.

Here’s the news flash every Republican doesn’t get or chooses to ignore:  Track the divergence between productivity and wages and it is the 1980s.  Track any number of economic indicators demonstrating the demise of the middle class and it is 1980s.  Track the economic damage to the middle class and the meteoric ascendancy of the wealthy, and it is 1980s.

First Fox debate...

First Fox debate…

Cut taxes, upload earnings to the cuticle pushed, gentrified echelon of the wealthy as spouted today by the Ben Hur cast of Republican presidential candidates and there isn’t a fly wings’ breadth of difference between now and what was peddled back in the 1980s by Ronaldus Maximus.

Here’s a question to stop those annoying uncles at cookouts this summer:  We’ve given 93 cents of every dollar in income growth to the top one-percent, why are the 99% not celebrating their new found prosperity?  “Big lotta ingrates they are, wouldn’t you agree Uncle Fester?”

I will be checking in sporadically today since I have flood clean-up duty so feel free to take the conversation in any direction you might like.


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