Friday, August 20, 2010

Rotten Eggs

As the economy continues to spiral down a record number of Americans are tapping their 401(k) to pay the bills. Both loans against savings and emergency withdrawals are up from last year. On the other end, 25% of employers have stopped making contributions and more employees have jobs that don’t even offer retirement accounts to begin with.

As well as worrying about that smell coming from your nest egg, you need to think about throwing out the ones in your refrigerator. The egg recall has spread to all five farms in Iowa owned by Jack DeCoster Inc. and has also been applied to the farms of another corporation a hundred miles away. It’s starting to look like bad feed which could be from something like contaminated fish protein that’s added to chicken feed but we don‘t know yet.

The last such outbreak was from the anti-biotic drugs they were using to keep the chickens laying eggs under horrible conditions or it could be some entirely new corporate malfeasance. The number of eggs involved has gone past a half billion and they’ve stopped announcing the number of eggs when adding new plant numbers and brands to the list. One brand recalled turned out to be counterfeit packaging according to the brand’s owner who denied authorizing DeCoster to package eggs under their name.

Jack DeCoster is well known for how many times he’s been charged with just about any violation that a giant corporate farm can be. Everything from massive manure spills into waterways to animal cruelty and neglect on a massive scale. He’s been fined 2 million dollars for knowingly hiring illegal immigrants and charged by OSHA for abusing workers in a variety of ways. Including but not limited to forcing them handle dead animals without gloves or protective masks in the presence of government inspectors and forcing them to live rat infested trailers adjacent to manure storage.

On a farm like this the volume of manure exceeds the sewage output of a large city. The ammonia and other chemicals in the air routinely exceeds EPA safety levels. Jack DeCoster’s hog operations in Iowa racked up so many violations in the 1990’s that the Iowa Attorney General classified him a habitual violator in 2000.

The truth is that there has always been food poisoning but as bigger and bigger corporations control nearly all food production the problem has become one of scale. Not only does the outbreak affect huge numbers of people but the “economies of scale” these corporate “farms” operate at allow them to do things no small farmer would dream of. A little chemical here, a little recombinant DNA there, what could go wrong?

Thursday, August 19, 2010

Need a job? Go to prison

Unemployment claims topped 500,000 last week for the first time in nine months. Homebuilders and construction companies are laying off large numbers despite this being the peak of the construction season. The number of people getting extended unemployment benefits under the Federal program grew by 300,000 last week alone.

There is no number available for how many people exceeded the 99 week limit last week and were been kicked to the curb. With little or no jobs being created it would seem likely to be in the hundreds of thousands reflecting the number who originally joined the program 99 weeks ago in September 2008 when layoffs were just starting to get into high number. This is only going to get worse as we will be coming into the peek period of layoffs over the next six months.

There is a bill in Congress to provide a 5th tier of benefits for the 99’ers but the Republicans and conservative Democrats are holding it hostage to gain an extension on the Bush tax cuts. At the same time there are calls to double all taxes to recover from the multi-trillion dollar deficits left from the Bush Administration but not to roll back the Reagan tax cuts that cut the top rate from 74% on incomes over three million in today‘s dollars.

Billionaires who structure their incomes to pretend they are paid only dividends and interest are paying, according to the IRS an average of 16% and they don’t pay social security taxes on most of their income either. They also are attracted to live in states that don’t have state income taxes instead getting their revenue by gouging the poor.

The rich also get gold plated lifestyles through their companies, executive chefs, personal assistants, chauffeured limos, private jets, vacation villas and golf outings around the world to discuss “business”. All of this costing millions per executive and is tax free. The corporations off shore their profits in order to pay no taxes. Fully two thirds of corporations operating in the US pay zero taxes and some even get billions back from all manner of schemes put in place by the Bush Crime Family.

For example, BP has been using free prisoner labor to do beach cleanup and gets a 2500 dollar tax credit for each slave (I mean job trainee) that they use.
All of the manufacturing training jobs in prisons have been eliminated (there is no demand for them on the outside after all) and have been replaced by call centers. There is a 50/50 chance that if you talk to a customer service rep on the phone (who isn’t in India), a 50/50 chance you are talking to an inmate. At least the inmate knows he’ll have a job tomorrow, do you?

Although there are reports that the call center workers on India are starting to demand higher wages and so more jobs are coming back to the US. This will mean a push to build more prisons. At the right a prison call center in Oregon.

Tuesday, August 17, 2010

Lìzhèng and raise your hands!

 The big news to come out this past Monday morning, Beijing time, was that
China's economy skipped past Japan's in the second quarter, becoming the world's second largest. The Japanese economy is valued at about $1.28 trillion, slightly below China's figure of $1.33 trillion. The gross domestic product of the United States was roughly $3.5T for the quarter.

These numbers are subject to interpretation however, for example if you adjusted China’s currency up 40% to bring it in line with the USD it would put their GDP at about 2.5T and you knock about 20% off the US economy for the non productive financial services industry that brings the US down to 2.8 T. That still leaves the US ahead of China but not by much, consumer spending in China only accounts for 35% of their economy
 and with 70% of the US economy based on giving each other haircuts and serving fries with that, is the US still ahead?

China does have perhaps four times the population of the US so you could still say it’s comparing apples and mandarin oranges since they have some 700 million people still living in abject poverty. The poor in China have one thing the poor in the US don’t have, real hope for the future. China creates new middle class people by the millions every year, the US is creating new poor people by the millions. China is creating new millionaires everyday, the US is making billionaires richer as they create new poor people.

China is building skyscrapers at such a rate that it has half of all the tall construction cranes in the entire world and consume 40% of the all world’s steel and concrete each year. They are building major projects bigger than anything the US has ever done even before Reagan took the economy off line. It took China just three years to build a 230 mph bullet train the equivalent of the distance from New York to Chicago. Obama barely got funding through Congress to start building what he calls a high speed train running from Chicago to St. Louis (a fraction of the distance) that might reach 90 mph, a train speed not seen in the US since, (wait for it) 1950.

There are few economists anymore that don’t see China passing the US to become the dominate super power, they just can’t agree on the time required. The popular press likes the twenty year estimate but some say just ten years and others point out China will begin its twelfth five year plan next year and they will probably set goals that will put them ahead of the US. This is without taking into account how far the US will have declined by then.

For you fans of Reaganomics and the “New American Century” this is your Mandarin lesson to help you prepare for that new century: to say “stop” when in a vehicle say “tíng chē”; to someone on foot simply say “zhànzhù“; but if you hear ”lìzhèng“ that means  “halt!” as used it’s by the military, you might also want to raise your hands.

Sunday, August 15, 2010

Will the majority vote?

This Time, Voter Anger Is No Surprise to Democrats

Published: August 14, 2010
Among the advantages Republicans hold as they seek to control Congress, one thing is missing: surprise. Unlike in 1994, there will be no sneak attacks.
In Sunday's NY Times article Jeff Zelleny looks at one of the big problems the Democrats have this fall and what they are doing about it -  "In 1994, when Republicans swept control of Congress, it was not until a few weeks before the election — and in some cases on Election Day itself — that some veteran Democrats knew they were truly at risk."
Jeff Zelleny - "The House speaker, Thomas J. Foley, and Dan Glickman, a congressman from Kansas who led the Intelligence Committee, were among the Democrats who lost their seats because they did not detect the political trouble ahead. At Labor Day that year, Mr. Glickman said, his polling showed that he held a 30-point lead. A month later, he was in a steep decline." 
Jeff Zelleny - “We did not anticipate the level of discontent out there until October,” Mr. Glickman recalled in an interview. “I was in parades all over my district, and I would see people campaigning for my opponent. I would say to my wife, ‘Who are these people?’ ”
Democrats seemed clueless in 1994 that they would be blamed for NAFTA since it was mostly the Republicans who had passed it. Under Reagan a large percentage of labor union membership had already abandoned Democrats, not realizing they were effectively ending the middle class dream for their children. By 1994 enough of the working class were ready to vote for the pie in the sky rhetoric of Republicans who had their "contract with America" offering to fulfill promises they felt Democrats were not. Every point of the Republican "contract" was either an outright lie or if it obligated the Republicans to observe ethics or term limits, it was forgotten before the ink was dry.
Jeff Zelleny - "This year, Democrats are all too aware of their detractors."
The Republicans are predicting another huge landslide this year based on the huge numbers of teabaggers that have turned out for rallies. The problem for Republicans is that hasn't really happened. The millions bussed  into the Washington rally were really thousands and rallies that had been getting a thousand are now down to getting dozens. Having them all stand ten feet apart to try to make the crowd look bigger in photos was self defeating in the long run as it demoralized the people who did show up. It's hard to get a lynch mob worked up going if they're spread that thin.
Then there is the small matter of the Republicans offering nothing new. In 1994 it was all hypothetical, people who thought the American dream might be fading away were willing to buy into vague trickle down notions, imagining they were going to get one of those new high paying jobs the rich would create. Most people now grasp that the "wealth redistribution" the Republicans growl about really means from the middle class to rich Republicans.
Republicans were predicting huge victories in 2006 and 2008 and fell flat, largely from the turn out of the millennium generation voters who see clearly that the American dream is gone and are not swayed by the bigotry used to frighten their grand parents into voting Republican. Then there are the black and Hispanic voters that had always voted for the conservatives in the past or just did not vote who have realized they can and must turn elections. 
Jeff Zelleny - "Many Democrats have raised more money so far this year than in the entire previous election cycle. They formed their campaign teams several months ahead of schedule and began running television advertisements earlier than ever. Realizing they could do little to improve the political climate, they are trying to fortify themselves with sharper tactics."
The only question is will the majority turn out to vote. Or will the average voter believe the the false choices of  "they're all crooks, why vote?" or "nothing changes". Things can change, they can get much worse, unimaginably worse. The danger of Republican rule is no longer hypothetical.