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Work the Bottom Before You Work the Top

1 Oct

My father was an engineer who spent his life working for Bethlehem Mines, the mining subsidiary of Bethlehem Steel. He was a chemical engineer who was in charge of process design for coal cleaning plants, the plants that separated impurities from raw coal so that the clean coal could be used to make coke for heating blast furnaces.

In a word, he was a “suit.” Though he generally wore dress slacks and a sport coat to work rather than a suite. And he often wore a bow tie rather than a long one. A real bow tie, one of those where you had to tie the knot yourself.

Still, his job required that he go down into coal mines on a regular basis. I’m not sure just why this was, that is, I don’t know why he had to see where and how the coal was mined in order to clean it. But he did.

And that means he knew, first hand, that working in a coal mine was nasty, dirty work, and dangerous. On many occasions he told me that a man shouldn’t be given managerial responsibility for coal mines unless that man had had experience working in a coal mine.

That seems like a good principle to me. It’s not so much that working on the coalface down in a mine gives you knowledge you need in order to turn a profit but that working the coalface was necessary to secure empathy for the men who put their lives at risking working that kind of job year after year, and decade after decade.

Managers should be stewards, not simply of profits, but of the workers under their control.

An exercise to the reader: generalize the principle beyond coal mining.

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A simple theory of recent American intellectual history

16 Sep

Throughout the 1970s and most of the 1980s, the so-called “right wing” was right about virtually everything on the economic front.  Most of all communism, but also inflation, taxes, (most of) deregulation, labor unions, and much more, noting that a big chunk of the right wing blew it on race and some other social issues.  The Friedmanite wing of the right nailed it on floating exchange rates.

Arguably the “rightness of the right” peaks around 1989, with the collapse of communism.  After that, the right wing starts to lose its way.

Up through that time, market-oriented economists have more interesting research, more innovative journals, and much else to their credit, culminating in the persona and career of Milton Friedman.

I’ve never heard tales of Paul Samuelson’s MIT colleagues mocking him for his pronouncements on Soviet economic growth.  I suspect they didn’t.

Starting in the early 1990s, the left wing is better equipped, more scholarly, and also more fun to read.  (What exactly turned them around?)  In the 1990s, the Quarterly Journal of Economics is suddenly more interesting and ultimately more influential than the Journal of Political Economy, even though the latter retained a higher academic ranking.  The right loses track of what its issues ought to be.  There is no real heir to the legacy of Milton Friedman.

The relative rise of the Left peaks in 2009, with the passage of Obamacare and the stimulus.  From that point on, the left wing, for better or worse, is a fundamentally conservative force in the intellectual arena.  It becomes reactive and loses some of its previous creativity.

Over those years, right wing thought, on the whole, became worse and more predictable and also less interesting.  But excess predictability now has infected the left wing also.  Attacking stupid ideas put forward by Republicans, whether or not you think that is desirable or necessary, has become their lazy man’s way forward and it is sapping their faculties.

Yet I am not pessimistic about discourse.  Our time is a wonderful era for independent thinkers, and many of them are bloggers, too.  It’s as if we have created a new political spectrum in a very small sliver of the world, a perhaps inconsequential eddy in a much larger and often unpleasant vortex.

via A simple theory of recent American intellectual history.

What Really Ails Detroit – NYTimes.com

16 Aug

American manufacturing has been in trouble even since its heyday, in the 1950s and 1960s, when the United States was the global economic powerhouse and American assembly-line workers earned very decent middle-class wages.

That era of prosperity was not, as is so often claimed, the manifestation of the American dream. Rather, it was, or should have been, a warning sign that America was riding a fleeting wave of progress. Almost nobody was looking hard enough to the future and asking what it would take to sustain success.

The reason so many manufacturing-sector workers in the United States received such high pay at that time was not that they had exceptional skills or had received superior training; it was that the corporations for which they worked were unsurpassed in their dominance and generated huge revenues.

But that dominance was, to a considerable degree, a momentary quirk of history: the absence, in the wake of World War II, of any real competition from other nations.

via What Really Ails Detroit – NYTimes.com.

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How to Really End Mass Incarceration – NYTimes.com

15 Aug

This is a start, but let’s wait and see.

Starting in the 1970s, a domestic “war on crime” dominated by antidrug policies and racial profiling fueled a prison-building binge that is morally — and now financially — bankrupt. Both political parties embraced draconian policies like mandatory minimum sentences, three-strikes laws and wide disparities in sentences for possession of crack versus powder cocaine. The result: by 2003, the United States had 4.6 percent of the world’s population but 22.4 percent of its prison population — even though violent crime started dropping in the 1990s. Prospects for reform looked bleak.

So I was elated when Attorney General Eric H. Holder Jr. announced on Monday that the government would commit to reducing the bloated prison population. This is without precedent: the nation’s top law enforcement official directed all federal prosecutors to exercise their discretion toward ending the relentless warehousing of inmates — the vast majority of whom are minorities — in federal prison for low-level drug crimes.

via How to Really End Mass Incarceration – NYTimes.com.

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Ideas to Bolster Power Grid Run Up Against the System’s Many Owners – NYTimes.com

16 Jul

Our current power grid is a balkanized mess owned and operated by 500 different entities. It needs to be redesigned and rebuilt. But we also need to allow for resilience at the local level so individual communities will have their own power from renewables sources.

For now, engineers in the grid redesign project have determined that conducting business as usual between 2010 and 2030 would require $18.5 billion in new transmission lines in the United States, while a system designed to integrate renewables like wind energy on a large scale would cost $115.2 billion. In some places, however, renewables could cut electricity costs by allowing the replacement of high-cost generators with lower-cost ones.

The technology, the engineering skill and even the money are all available, experts say, but the ability to reach agreement on such a grid is not. Dozens of experts said in interviews that there were simply too many players, both commercial and governmental, and too many conflicting interests.

via Ideas to Bolster Power Grid Run Up Against the System’s Many Owners – NYTimes.com.

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Boom in Luxury Towers Is Warping New York Real Estate Market – NYTimes.com

19 May

“There are only two markets, ultraluxury and subsidized housing,” said Rafael Viñoly, the architect who designed the tower on Park Avenue at 56th Street, which is called 432 Park.

The rush to build these towers underscores the gap between rich and poor in New York City, said James Parrott, chief economist for the Fiscal Policy Institute, a liberal research organization supported by unions. He said that median family income in the city had fallen 8 percent since 2008.

“Manhattan’s superluxury condo boom, along with rocketing foreclosures in Queens and record homelessness, present an unobstructed view of accelerating polarization in this recovery,” Mr. Parrott said.

via Boom in Luxury Towers Is Warping New York Real Estate Market – NYTimes.com.

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Jeffrey Sachs on the stubborn, pathological intransigence of the 1% | Exopermaculture

10 May

Sachs described an environment of Wall Street influencing politicians with growing campaign contributions. In the 2012 election cycle, political contributions by the securities and investment sector hit $271.5 million, compared with $176 million in 2008, according to the Center for Responsive Politics.

“I meet a lot of these people on Wall Street on a regular basis right now,” he continued.

“I am going to put it very bluntly: I regard the moral environment as pathological. And I am talking about the human interactions . . . I’ve not seen anything like this, not felt it so palpably.”

“They have no responsibility to pay taxes; they have no responsibility to their clients; they have no responsibility to people, to counterparties in transactions,” he said. “They are tough, greedy, aggressive and feel absolutely out of control in a quite literal sense, and they have gamed the system to a remarkable extent.”

via Jeffrey Sachs on the stubborn, pathological intransigence of the 1% | Exopermaculture.

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One in four US workers are “guard labor” | Phil Ebersole’s Blog

26 Apr

One fourth of the American work force is employed in “guard labor”, not producing anything themselves, but keeping the actual workers in line, according to a studies by economists Samuel Bowles of the Santa Fe Institute and Arjun Jayadev of the University of Massachusetts.    Comparing nations, they reported that the greater the amount of inequality in a society, the higher the percentage employed in guard labor.

via One in four US workers are “guard labor” | Phil Ebersole’s Blog.

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The 1 Percent’s Solution – NYTimes.com

26 Apr

Thus, the average American is somewhat worried about budget deficits, which is no surprise given the constant barrage of deficit scare stories in the news media, but the wealthy, by a large majority, regard deficits as the most important problem we face. And how should the budget deficit be brought down? The wealthy favor cutting federal spending on health care and Social Security — that is, “entitlements” — while the public at large actually wants to see spending on those programs rise.

You get the idea: The austerity agenda looks a lot like a simple expression of upper-class preferences, wrapped in a facade of academic rigor. What the top 1 percent wants becomes what economic science says we must do.

via The 1 Percent’s Solution – NYTimes.com.

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James Surowiecki: America Goes Off the Books : The New Yorker

23 Apr

The underground economy is two-trillion annually.

The U.S. is certainly a long way from, say, Greece, where tax evasion is a national sport and the shadow economy accounts for twenty-seven per cent of G.D.P. But the forces pushing people to work off the books are powerful. Feige points to the growing distrust of government as one important factor. The desire to avoid licensing regulations, which force people to jump through elaborate hoops just to get a job, is another. Most important, perhaps, are changes in the way we work. As Baumohl put it, “For businesses, the calculus of hiring has fundamentally changed.” Companies have got used to bringing people on as needed and then dropping them when the job is over, and they save on benefits and payroll taxes by treating even full-time employees as independent contractors. Casual employment often becomes under-the-table work; the arrangement has become a way of life in the construction industry. In a recent California survey of three hundred thousand contractors, two-thirds said they had no direct employees, meaning that they did not need to pay workers’-compensation insurance or payroll taxes. In other words, for lots of people off-the-books work is the only job available.

via James Surowiecki: America Goes Off the Books : The New Yorker.

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