Sunday, January 29, 2012

The Emerging Market Paradigm

You know, the one in which the motivated and uncomplaining developing world is contently seeing their living standards rise while the fat and lazy working class of the developed world jealously guards their privileges ?

Workers at the Regency Ceramics factory in the India raided the home of their boss, and beat him senseless with led pipes after a wage dispute turned ugly.

The workers were enraged enough to kill president K. C. Chandrashekhar after their union leader, M. Murali Mohan, was killed by baton-wielding riot police on Thursday. The labor violence occurred in Yanam, a small city in Andra Pradesh state on India’s east coast.(1)

The next Thomas Friedman column about India ?

1'India Factory Workers Revolt, Kill Company President' - Forbes

Saturday, January 28, 2012

5 Year Baltic Dry Index

Showing a deeply depressed global economy.

Source: 1Bloomberg

Corporate Profit Rate Growth Has Peaked (?)

From Goldman Sachs (via Zero Hedge).

As a Marxist, I pay attention to this stuff, as do capitalists. Extract away the gibberish about our economic system and it comes down to profits.

Throw in all the extant debt, or fictitious capital, and most likely we are heading into another recession.


Charter Schools and Extended School Days

The current idea in the charter school movement is to extend school days, thus making the students study longer and taking them away from their bad environments -- you know -- friends and family.

KIPP, a major charter school company writes :

KIPP teachers are expected to help all students succeed, and they typically work a nine-hour work day during the week, half days on selected Saturdays, and three weeks in the summer.(1)

These increased hours are not accompanied by increased pay, which generally matches the prevailing salary of the area. (i.e is 'competitive', as one will read in KIPP job adverts)

So why would one work many more hours for less pay ? While teachers generally are idealists, one can be an idealist in any academic setting. The bottom line is this model can only function in a highly depressed economy, where there is a large pool of college graduates with high debt and few job prospects.


Wednesday, January 25, 2012

The Special Forces, The Private Army of the President

The Special Forces are being celebrated today as assassins of kidnappers (all guilty, without trial) -- but the celebration is being thrust upon us with a political motive. After all, who could argue against saving a beautiful American woman in distress ? Just ignore what the Special Forces is more and more each day -- a secret, private army of the president, answerable only to him.

Saturday, January 21, 2012

All Costs are Labor Costs

This is what minimizing the Labor Theory of Value will do, a complete ignorance of what constitutes a labor cost.

Regarding the iPhone:

Then a bid for the work arrived from a Chinese factory.

When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.


The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day. When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past. “The scale is unimaginable,” he said.


It is hard to estimate how much more it would cost to build iPhones in the United States. However, various academics and manufacturing analysts estimate that because labor is such a small part of technology manufacturing, paying American wages would add up to $65 to each iPhone’s expense. Since Apple’s profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward.(1)

I get that direct wage costs are often a small part of a company's budget. But providing engineers at "almost no cost" is also a cost, one born by the State in this case. Engineers have to be educated, fed, and housed, whether the PRC or Apple is paying for it.

Every "inventory" , "transportation", etc. cost in a company's budget can be reduced to a labor cost if one looks far enough back in the chain of origination.

I don't understand the point of this article; it talks about state subsidies and 72 hour work weeks, yet states labor costs are not the issue. Maybe at it's core is an emoting on the desire to kick working class Americans around. Though it's not their fault the myopic U.S. ruling class decided to dismantle is manufacturing base (which albeit is being resurrected through insourcing as the U.S. becomes the cheap labor destination of the OECD).

But in capitalism, no wage is ever low enough. And there is always someone poorer than you, somewhere, who can be exploited.

1'How U.S. Lost Out on iPhone Work' - NYT

Friday, January 20, 2012

The Virgin Mary

The dogma of the Free Market is our modern equivalent to the Immaculate Conception.

China YOY on Sales Growth

Year on year retails sale in China rose 18.1% in December, 13.8% when adjusted for inflation.

Good God, talk about an economy that is surging. And comparatively little of this is done on credit.

1'China consumers spend, even as growth eases' - Marketwatch

Monday, January 16, 2012

Brief Thoughts on the Civil War

The emotional aspect of Leftist political critique is not, in total, a positive thing. And it has a tendency to bleed into some backward political positions, such as an ambiguity over the Civil War (see Howard Zinn). Because we on the Left tend to root for the underdog, this too often translates into a weird support, or waffling in condemnation, of the South. This support is usually camouflaged as saying that the war was unnecessary and that the slaves could have be freed through some repurchase mechanism. (Except, of course, this was tried numerous times and was always rejected.) Therefore, under this 'Left' critique, the Civil War was just a battle between ruling class factions, with the North representing the rapacious Northeast financial elite.

The realty is the South needed slavery, they wanted to expand it, and they were imperialist force with eyes to the Caribbean.

And, it is my opinion that the much reviled Sherman should be celebrated. For what ultimately needed to happen was for the Southern aristocracy to have their back broken. Instead, they were coddled, and Blacks were dealt with another 100 years of state sponsored terror as the Northern armies evaporated. And this reactionary force in American life has never gone away -- the split between right-to-work and closed-shop states is but one manifestation up to the present time.

A Useless Appendage

Two generations of stagnant wage growth and nearly every tenured American economist thinks the models and intellectual paradigms are basically fine.

And if challenged, they generally will get huffy and talk about how capitalism has led to spectacular growth somewhere else in the world.

Tuesday, January 10, 2012


Within a few years, China's PPP GDP - the best measure of the total value of goods and services produced by a country's economy - will surpass the U.S. This isn't even in doubt, yet it is something historic and not fully grasped by all political layers in the West. While China's nominal - or exchange rate GDP - remains much lower, it seems to be a truism that nominal GDP is a lagging indicator of economic power. Looking at the countries who move up quickly in PPP GDP rankings and it is a who's who of BRIC-ish types.

China is no longer - if it ever was - a country based on prison factory labor (as Chris Hedges insinuated in his recent Book TV interview). It is no longer a country based upon labor-intensive cheap manufacturing. If anything, the collapse of unions and a 10 year recession have reduced the U.S. to the cheap labor country of the OECD.

Monday, January 9, 2012

Not Elite, Ruling Class

I think folks on the Left need to avoid the term 'elite' when they mean 'ruling class'. Elite is too fuzzy, and is used by politicians of all stripes to portray a nefarious, but perhaps cloaked, 'other'. Ruling class is far more precise, accurate, and makes one's politics clear.

Thursday, January 5, 2012

Americans Love the Notion of Innocence, Not Kids

Because cops wouldn't have the uninhibited discretion to kill 8th graders with air guns in a society that truly cared about kids. They instead would have a reasonably trained and skilled police force that could the tell the difference between a real gun and a fake. Our cops shoot first, and ask questions - or cover up - later.

We can contrast the cold-blooded nature of the national response to the Brownsville murder with the outrage in regards to the Penn State accusations. Anything to do with sex and the pillage of innocence deservedly turns up the American outrage meter, while anything to do with unwarranted violence is ignored. Especially when the violence is meted out from positions of authority within our police state structure.

Tuesday, January 3, 2012

Ron Paul, Fraud, II

I can't fathom how someone who has gone through pregnancy could tolerate a politician like Paul. These fanatical pro-fetus politicians leave no room for the gray area that exists within the possible medical difficulties that can occur during pregnancy. Just because it was smooth for you doesn't mean it is for everyone else, after all, some 20 % of pregnancies result in miscarriage. Taking the pro-fetus position of Ron Paul at face value, this means there should be 'investigations' of all these incidents to disprove negligence. Of course, the pro-fetus position is one of emotion and an avoidance of the impossible logic making up its backbone. It is also antithetical to a message of Liberty, which is no surprise, since the slogan as spouted by Paul is fraudulent at its core.

This is no great revelation, but his continued strength amongst the young and disaffected is a symptom of our discredited political system.

Monday, January 2, 2012

Ron Paul, Fraud

He believes in liberty unless (among other things) you are pregnant and for whatever reason want to have an abortion.

Sunday, January 1, 2012

Polling on Iran

To those who still believe there is a nascent revolutionary spirit in the American people, please look at the polling on Iran.

NBC/Wall Street Journal:

"If Iran continues with its nuclear research and is close to developing a nuclear weapon, do you believe that the United States should or should not initiate military action to destroy Iran's ability to make nuclear weapons?"

12/2011 Yes:54%, No: 38%


I get that this is a loaded question, but after Iraq, how can "Yes" even be a consideration ?

And, Americans who would protest a strike on Iran could easily be lumped into Washington's 'providing support for a terrorist entity' category and hauled off for indefinite detention.

The U.S. is an incredibly mean-spirited, self-absorbed country and things aren't getting better.

1Poll PDF, page 26