Orthodox conservatism has long held that the collapse of the USSR was inevitable (though sped by Reagan’s policies) because of the internal contradictions of socialism. The internal contradictions, which mean that true socialism will inevitably fail, are real (I have lived and worked in formerly socialist countries, and have seen the effects of that system).
What we are now seeing, though, is that there are different, though equivalent, internal contradictions to laissez faire capitalism. If wealth can be used to develop ever greater wealth, and that allows political power,an inevitable result is the concentration of power and wealth in the hands of a few- with consequent diminution of living standards (and, eventually, political power) for the majority.
That situation is in fact as unsustainable as pure (or doctrinaire) socialism. It is ironic, but from the long view, perhaps the greatest hope for the poor is that they are being joined by so many formerly middle class people- as dissatisfaction rises, so will political unrest.
Both Obama’s 2008 victory and the rise of the “Tea Party” movement are in large measure, I believe, due to a large and growing dissatisfaction with the current state of affairs. That dissatisfaction is at the moment unfocused, but if it ever becomes organized, the system will face strains not seen for generations.
The current distrust of government and of most formal holders of power (scientists, employers, etc)does not bode well for an easy solution.
Here’s hoping I am wrong.
The comment above is accurate. Structural change for the middle class is a 21st century fact.
American economic competitors, Japan, China, Korea, Singapore, practice economic nationalism or mercantilism. Laissez-faire capitalism, the free market, is an empty ideology that serves the narrow interest of neo-liberals.
January trade deficit jumps to $46.3 billion
Martin Crutsinger, AP Economics Writer, On Thursday March 10, 2011, 2:52 pm EST
WASHINGTON (AP) — A surge in oil prices and rising demand for foreign cars and machinery helped push imports up at the fastest pace in 18 years in January, giving the country the largest trade deficit in six months.
The January deficit increased 15.1 percent to $46.3 billion, the Commerce Department said Thursday.
Exports rose 2.7 percent to an all-time high of $167.7 billion. But imports rose at nearly twice the pace of exports, to $214.1 billion. A big jump in demand for a variety of foreign goods from industrial machinery and telecommunications equipment to autos drove the increase. America’s foreign oil bill rose 9.5 percent, underscoring concerns that higher oil prices could slow the economic growth.
A widening trade deficit hurts the U.S. economy. When imports outpace exports, more jobs go to foreign workers than to U.S. Workers.
Over the past thirty years, good jobs have been outsourced to foreign countries with no thought to the consequences by the investor class and political class. Share value can not be the dominant operative principle for capitalism, rather, shared prosperity for the many rather than 1% few is better for society.
In his memorable 1896 “Cross of Gold Speech”, William Jennings Bryan anticipated the trickle down theory.
There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.
Lower expectations for Americans, inflicted by the political class and their enablers, will not be tolerated. Social unrest in Wisconsin is just the beginning.
Where’s the economic recovery?
By Harold Meyerson
Wednesday, March 9, 2011
Suppose the economy recovers but everyone still feels lousy.
It could happen. In fact, it’s happening right now.
Our current recovery, alas, is different from all previous recoveries that America has experienced since the end of World War II. The earlier ones were marked by wage increases. As the economy picked up and more revenue started flowing to business, those businesses shared the revenue with their employees. Mark Whitehouse of the Wall Street Journal looked at how businesses were dividing up the pie 18 months into every previous recovery since 1947 and found that 58 percent of their increases in productivity trickled down to their workers in increased wages.
This time around, the numbers are starkly different. Productivity increased 5.2 percent from the recovery’s start in mid-2009 to the end of 2010, he found, but wages rose by a minuscule 0.3 percent. That means just 6 percent of productivity gains have gone to our newly more-productive workers.
Where is the other 94 percent going? To profits, which have been increasing at a record clip for the past three quarters. To funds on the corporations’ balance sheets, which the Federal Reserve calculates at nearly $2 trillion. To shareholders. To the companies’ stock buybacks.
Indeed, many of the nation’s leading corporations have been spending more money buying their own shares than they have on job-creating investments, research and development, or higher wages. In the first three quarters of 2010, according to Standard & Poor’s, companies’ purchases of their own shares came to $212 billion – an increase of 80 percent, 221 percent and 128 percent for each of those quarters over the corresponding three-month periods in 2009.
The jobs that businesses have been creating, moreover, aren’t anything to write home about. They pay significantly less than the jobs that have been lost. According to research from the National Employment Law Project, as of January, 40 percent of the jobs lost in the recession came from higher-wage industries but just 14 percent of the jobs created during the recovery were in those industries. Lower-wage industries, where jobs paid on average less than $15 an hour, accounted for 23 percent of the jobs lost but fully 49 percent of newly created ones. Among the industries that grew in 2010, the top three occupations were retail sales clerks, cashiers and food preparers; each has a median hourly wage of less than $10.
It’s one thing for a nation to be downwardly mobile during a recession. It’s quite another to be downwardly mobile during a recovery – but that looks to be precisely what’s happening.
Why the difference between this recovery and its predecessors? For one thing, it’s happening at a time when almost the entire private-sector workforce is nonunion – 93.1 percent, according to the Bureau of Labor Statistics, the highest level of nonunion employment since some time in the 19th century, before such record-keeping began. Absent unions, workers are dependent entirely on management’s willingness to share their increased revenue with their employees. And absent unions, apparently, no such willingness exists.
We didn’t arrive at this predicament accidentally. Since the early 1980s, when General Electric’s widely admired chief executive, Jack Welch, declared that the primary goal of the corporation was to increase shareholder value, America’s corporate managers have been faithfully rewarded for treating their employees as necessary – or unnecessary – evils, to be shed whenever possible, or replaced by foreign or temporary workers, and most certainly not allowed to form unions or receive wage increases. Thirty years later, this form of shareholder capitalism has swept the field of nearly all opposition, with results – chiefly, the eclipse of the decent-paying job – that grow more glaring with each passing day.
The decline in good jobs may well be a factor in the sentiment toward worker rights that’s emerged since Wisconsin Gov. Scott Walker declared war on his state’s public employees. A number of polls conducted since the conflict emerged have shown that, by a two-to-one margin, the American people support public employees’ right to bargain collectively – a response that pleasantly surprised many longtime union supporters and that has emboldened them to plan recall campaigns against Walker and kindred union-bashers.
But the decline in good jobs also complicates President Obama’s reelection prospects. Economic recoveries have always been good news for presidents seeking another term. But a recovery in which relatively few Americans share in the bounty is something new under the electoral sun. When shareholder capitalism triumphs, neither workers nor voters feel notably upbeat. Incumbents – the president most especially – beware.
Degrees and Dollars
By PAUL KRUGMAN
Published: March 6, 2011
It is a truth universally acknowledged that education is the key to economic success. Everyone knows that the jobs of the future will require ever higher levels of skill. That’s why, in an appearance Friday with former Florida Gov. Jeb Bush, President Obama declared that “If we want more good news on the jobs front then we’ve got to make more investments in education.”
But what everyone knows is wrong.
The day after the Obama-Bush event, The Times published an article about the growing use of software to perform legal research. Computers, it turns out, can quickly analyze millions of documents, cheaply performing a task that used to require armies of lawyers and paralegals. In this case, then, technological progress is actually reducing the demand for highly educated workers.
And legal research isn’t an isolated example. As the article points out, software has also been replacing engineers in such tasks as chip design. More broadly, the idea that modern technology eliminates only menial jobs, that well-educated workers are clear winners, may dominate popular discussion, but it’s actually decades out of date.
The fact is that since 1990 or so the U.S. job market has been characterized not by a general rise in the demand for skill, but by “hollowing out”: both high-wage and low-wage employment have grown rapidly, but medium-wage jobs — the kinds of jobs we count on to support a strong middle class — have lagged behind. And the hole in the middle has been getting wider: many of the high-wage occupations that grew rapidly in the 1990s have seen much slower growth recently, even as growth in low-wage employment has accelerated.
Why is this happening? The belief that education is becoming ever more important rests on the plausible-sounding notion that advances in technology increase job opportunities for those who work with information — loosely speaking, that computers help those who work with their minds, while hurting those who work with their hands.
Some years ago, however, the economists David Autor, Frank Levy and Richard Murnane argued that this was the wrong way to think about it. Computers, they pointed out, excel at routine tasks, “cognitive and manual tasks that can be accomplished by following explicit rules.” Therefore, any routine task — a category that includes many white-collar, nonmanual jobs — is in the firing line. Conversely, jobs that can’t be carried out by following explicit rules — a category that includes many kinds of manual labor, from truck drivers to janitors — will tend to grow even in the face of technological progress.
And here’s the thing: Most of the manual labor still being done in our economy seems to be of the kind that’s hard to automate. Notably, with production workers in manufacturing down to about 6 percent of U.S. employment, there aren’t many assembly-line jobs left to lose. Meanwhile, quite a lot of white-collar work currently carried out by well-educated, relatively well-paid workers may soon be computerized. Roombas are cute, but robot janitors are a long way off; computerized legal research and computer-aided medical diagnosis are already here.
And then there’s globalization. Once, only manufacturing workers needed to worry about competition from overseas, but the combination of computers and telecommunications has made it possible to provide many services at long range. And research by my Princeton colleagues Alan Blinder and Alan Krueger suggests that high-wage jobs performed by highly educated workers are, if anything, more “offshorable” than jobs done by low-paid, less-educated workers. If they’re right, growing international trade in services will further hollow out the U.S. job market.
So what does all this say about policy?
Yes, we need to fix American education. In particular, the inequalities Americans face at the starting line — bright children from poor families are less likely to finish college than much less able children of the affluent — aren’t just an outrage; they represent a huge waste of the nation’s human potential.
But there are things education can’t do. In particular, the notion that putting more kids through college can restore the middle-class society we used to have is wishful thinking. It’s no longer true that having a college degree guarantees that you’ll get a good job, and it’s becoming less true with each passing decade.
So if we want a society of broadly shared prosperity, education isn’t the answer — we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.
What we can’t do is get where we need to go just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages.
Wed Mar 9, 12:10 pm ET
Jobs returning — but good ones not so much
By Zachary Roth
When it comes to jobs, it’s not just quantity that matters — it’s also quality. It’s great news that the economy is finally producing jobs again – even if it’ll take another few years of this kind of growth to get us back to where we were before the Great Recession. But that also means it’s now time to ask what kind of jobs are being created. And on that front, things are a lot less encouraging.
Several recent studies suggest that the new jobs pay less and offer fewer work hours than the ones they have replaced. Let’s look at the numbers:
• Lower-wage industries — things like retail and food preparation — accounted for 23 percent of the jobs lost during the recession, but 49 percent of the jobs gained over the last year, a recent study (pdf) by the National Employment Law Program found. Higher-wage industries, by contrast, accounted for 40 percent of the jobs lost, but just 14 percent of the jobs gained. In other words, low paying jobs are increasing as a percentage of total jobs, while high-paying jobs are on the decline.
• Meanwhile, the percentage of those working who have part-time jobs and want full-time ones surged in mid-February to 19.6 percent — almost as high as it was a year ago before the recovery began, according to Gallup numbers. That suggests, of course, that a large number of the new jobs created over the last year are part-time.
• And a recent Wall Street Journal analysis found that even though productivity rose 5.2 percent from mid 2009 to the end of 2010, wages increased by just 0.3 percent. That means only 6 percent of productivity gains were shared with workers. In past recoveries, that figure has averaged 58 percent. This time around, far more of the gains went to shareholders, in the form of profits, which are at record levels.
There are no easy answers for how to fix the problem. Some argue that workers need more clout in their relationship with employers, something that would require a renaissance of private-sector labor unions, which have been on the decline for the last half-century. But that prospect looks unlikely: Indeed efforts are underway in several states to make public-sector unions as weak as their private-sector counterparts.
Still, as the economy continues to add jobs in the coming months, it’s worth keeping the issue of quality in mind. An economy with a glut of low-paying and part-time jobs isn’t an economy that’s working for most Americans.
82 percent of US schools may be labeled ‘failing’
(AP) – 15 hours ago
The number of schools labeled as “failing” under the nation’s No Child Left Behind Act could skyrocket dramatically this year, Education Secretary Arne Duncan said Wednesday.
The Department of Education estimates the percentage of schools not meeting yearly targets for their students’ proficiency in in math and reading could jump from 37 to 82 percent as states raise standards in attempts to satisfy the law’s mandates.
The 2002 law requires states to set targets aimed at having all students proficient in math and reading by 2014, a standard now viewed as wildly unrealistic.
“No Child Left Behind is broken and we need to fix it now,” Duncan said in a statement. “This law has created a thousand ways for schools to fail and very few ways to help them succeed.”
Duncan presented the figures at a House education and work force committee hearing, in urging lawmakers to rewrite the Bush-era act. Both Republicans and Democrats agree the law needs to be reformed, though they disagree on issues revolving around the federal role of education and how to turn around failing schools.
A surge in schools not meeting annual growth targets could have various implications. The most severe consequences — interventions that could include closure or replacing staff — would be reserved for those schools where students have been failing to improve for several consecutive years.
Duncan said the law has done well in shining a light on achievement gaps among minority and low-income students, as well as those who are still learning English or have disabilities. But he said the law is loose on goals and narrow on how schools achieve them.
“We should get out of the business of labeling schools as failures and create a new law that is fair and flexible, and focused on the schools and students most at risk,” Duncan said.
Russ Whitehurst, director of the Brown Center on Education Policy at the Brookings Institute, said some states and districts have dug themselves into a hole by expected greater gains in the final years.
“The reality is coming home that you can’t essentially demonstrate very little progress for ten years and then expect all of your progress to occur in the last two or three years,” Whitehurst said.
He said some states believed improvement would accelerate as students advanced, creating a “snowball effect,” while others put off the heavy lifting to avoid the consequences.
Daria Hall, Education Trust’s K-12 policy director, said it was also important to distinguish between schools that don’t meet the annual growth benchmark for one year, versus those who have failed to do so for two consecutive years and are labeled as being “in need of improvement.”
Both distinctions could mean vastly different outcomes in terms of how many schools are subject to which interventions. The Department of Education was not able to provide data breaking down how many of the 82 percent would be failing to meet yearly goals for one year, versus consecutive years.
Hall said there are many ways states can meet their annual achievement benchmarks, and questioned whether the 82 percent figure took them all into consideration. Amy Wilkins, Education Trust’s vice president for government affairs and communications, also noted that schools which are struggling are given various options — contesting Duncan’s assessment that the law is tight on means and loose on goals.
“There is an objective finish line with annual finish line targets for everybody,” Wilkins said.
Paul Manna, a professor focusing on education policy at the College of William & Mary, noted that while there are specified goals, what is considered “proficient” in math and reading varies by state.
He said the rising number of schools not meeting the benchmarks could become unmanageable.
“There’s no way given the resources, the personnel available, to do what would be required, that they’d be able to do it,” Manna said.
High-wage job gains scarce
Report: Segment slower to rebound
Sunday, March 6, 2011 02:58 AM
By Ruth Mantell
WASHINGTON — Higher-wage industries have been lagging when it comes to private-job creation, according to a new report from a worker advocacy group.
Higher-wage industries constitute 14 percent of recent private-job growth, though they accounted for 40 percent of private-job losses during the labor market’s downturn, according to the report from the National Employment Law Project, a national advocacy organization based in New York that promotes employment rights of lower-wage workers.
Meanwhile, lower-wage industries are responsible for 49 percent of recent growth, compared with 23 percent of losses, while midrange-wage industries constitute 37 percent of growth, compared with 36 percent of losses.
“These findings do suggest that for unemployed workers, as well as for those seeking to move up in the labor market or entering it for the first time, the current distribution of job opportunities has deteriorated, compared to before the recession,” the report said.
During the labor market’s downturn — the economy started losing private jobs in early 2008, and growth resumed in early 2010 — almost 9 million positions disappeared.
Although the economy has gained more than 1 million private jobs in the 12 months through January, the gains have been skewed toward mid- and lower-wage industries, according to the advocacy group.
“The bottom-heavy growth in industries like temporary employment services, restaurants, retail, and nursing and residential-care facilities, which pay median wages below $13 an hour, suggests that workers are not only encountering fewer job opportunities — they may also be seeing fewer well-paying jobs than before the recession,” according to the group.
Beth Bronsil of Anderson Township is director of Children’s Home Space and a retired teacher. / Provided
Teaching, learning valued in other countries
YOUR VOICE: RETIRED TEACHER BETH BRONSIL
11:36 PM, Mar. 7, 2011
I am a retired teacher. I loved every job I had during my 44 years in the profession. I had a variety of experiences that included work in private schools, urban schools and Head Start. I also had the opportunity to teach teachers.
I have taught children in Korea, Taiwan and China. These opportunities were for short periods and were demonstration classes for teachers. The difference between these brief experiences and my jobs in American schools is that in these countries you are dealing with one culture whose parents value education and have respect for teachers.
America is a land of many cultures. We are dealing with many children who are surrounded by poverty. Many of our children are homeless, without health care, being raised by teenage parents or deprived of early childhood experiences that will prepare them for a life of learning.
I am amazed that people believe that low test scores in these schools are the fault of the teachers.
I volunteer in a school one day a week and am helping a new teacher. Her day begins at 6:30 a.m. in the classroom. Her children arrive at 7:30. She uses her 30-minute lunch break to answer phone calls from parents or set up the material for the group lesson for the afternoon. Many days she is there until 6:30 p.m. She is in school almost every Sunday to work on materials for the lessons of the week, and there are often many other teachers in the building at this time. She used winter break days to work in the classroom.
She is a new teacher, so she will have to spend six weeks this summer in university classes to keep her state license. Six semester hours may cost $2,400 or more. This teacher is probably paying back student loans that have a high interest rate.
I know that this teacher and many other teachers will be back in the classroom one month before school opens.
No Child Left Behind has made testing companies rich and deprived children of the love of learning. If you go to Korea and visit the schools, they are rich with art, music, physical education, science labs and outstanding early childhood programs. Teachers are important people in the lives of children. School is a preparation for life, not a preparation for tests.
Our country spends billions of dollars on contracts for the wars in Iraq and Afghanistan. We spent tax money to save banks and Wall Street.
I am sad that this country is attacking teachers and making America believe that they are privileged individuals with a huge paycheck.
Our leaders need to teach for a week in urban schools.
We could videotape this experience and make a documentary on the hours one needs to spend making this a successful experience for children.
We are going to lose the best teachers in our public schools. How long can you do this work if the country thinks you are a privileged class taking advantage of the taxpayers?
laissez faire capitalism – where are the good jobs?