Well, something many of of have been clamoring for may just come to pass! A Spanish lawyer has placed the wheels of justice in motion against a gaggle of Bush Administration stooges. The complain alleges the men gave legal cover to the torture of terrorism suspects at Guantanamo Bay, Cuba, by claiming that the U.S. president could ignore the Geneva Conventions and by adopting an overly narrow legal definition of torture.
The all star cast includes: Alberto Gonzales; Douglas Feith; former Vice President Dick Cheney's chief of staff David Addington; Justice Department officials John Yoo and Jay S. Bybee; and Pentagon lawyer William Haynes. The complaint has a long road ahead of it, and only addresses lawyers who rendered legal advice enabling torture.
It's a start!
Al
Monday, March 30, 2009
Thursday, March 26, 2009
GWB's "Ownership Society"
A recent article on line cites a 2007 Federal Reserve Bank survey that found that the average American approaching retirement had amassed a staggering $60,000 in 401(k) savings. Since that was pre-meltdown, one can only wonder what they are worth today. Perhaps enough for part of a "Golden Year in the Sun". The use of the singular is not a typo.
The article goes on to give insights into the number of firms that are going to reduce or terminate matching contributions to 401(k) and similar defined contribution plans. In short, more and more future retirees are going to be in less that stellar financial shape.
What gave me pause about GWB's "Ownership Society" and the attendant privatization of part of Social Security is that if you are living hand to mouth, as at least 50% of the population is doing, the investment in the future you are able to make is paltry, if any at all. Take Social Security and make part of it subject to the vacillations of the market, and today's paltry can look robust compared to tomorrow's down market.
For example, my Mom worked until she was 70, as it was her major form of entertainment. The last 15 years of that time, she pumped as much as she could into a 401(k). She retired in late Summer of 2000, and six months later began receiving mandatory distributions of her 401(k). Less than 2 years later, due to the market tumble following 9/11, every dollar she was forced to withdraw over the next 2 1/2 years had originally cost her an average of $1.50. She had no idea of what was going on, nor did I, as I was totally unaware that her monthly "pension" included these 401(k) funds until late in the game. My "bad" for not knowing where the money really came from, I guess. Had I known at retirement time, I would have encouraged her to move the funds from a stock based portfolio to lower yield, lower risk investments. But, since these were mandatory distributions, once the market fell, the damage was done. She couldn't halt distributions to wait for the market to rise.
"Ownership Society" is a truly Orwellian term. It refers to something that, for a significant portion of the population, really only exists in the abstract. As Yogi Berra would have said, "You can't own anything until you own it." Like it or not, the lower 50% of the income scale in the US do not earn enough to "own" a lot, and it takes a lot to retire. We didn't even encourage building equity in one's home the past 10 years. Placing the whole monkey on their backs is fine, but just don't make it look like a glorious, slam dunk ticket to a secure future.
But then, for the private firms that would receive this privatized Social Security money to invest, the scale of what they could own as a result would be staggering. And, as we have seen, the US financial industry truly has the everyday working stiff's best interests at heart.
WASF
Al
The article goes on to give insights into the number of firms that are going to reduce or terminate matching contributions to 401(k) and similar defined contribution plans. In short, more and more future retirees are going to be in less that stellar financial shape.
What gave me pause about GWB's "Ownership Society" and the attendant privatization of part of Social Security is that if you are living hand to mouth, as at least 50% of the population is doing, the investment in the future you are able to make is paltry, if any at all. Take Social Security and make part of it subject to the vacillations of the market, and today's paltry can look robust compared to tomorrow's down market.
For example, my Mom worked until she was 70, as it was her major form of entertainment. The last 15 years of that time, she pumped as much as she could into a 401(k). She retired in late Summer of 2000, and six months later began receiving mandatory distributions of her 401(k). Less than 2 years later, due to the market tumble following 9/11, every dollar she was forced to withdraw over the next 2 1/2 years had originally cost her an average of $1.50. She had no idea of what was going on, nor did I, as I was totally unaware that her monthly "pension" included these 401(k) funds until late in the game. My "bad" for not knowing where the money really came from, I guess. Had I known at retirement time, I would have encouraged her to move the funds from a stock based portfolio to lower yield, lower risk investments. But, since these were mandatory distributions, once the market fell, the damage was done. She couldn't halt distributions to wait for the market to rise.
"Ownership Society" is a truly Orwellian term. It refers to something that, for a significant portion of the population, really only exists in the abstract. As Yogi Berra would have said, "You can't own anything until you own it." Like it or not, the lower 50% of the income scale in the US do not earn enough to "own" a lot, and it takes a lot to retire. We didn't even encourage building equity in one's home the past 10 years. Placing the whole monkey on their backs is fine, but just don't make it look like a glorious, slam dunk ticket to a secure future.
But then, for the private firms that would receive this privatized Social Security money to invest, the scale of what they could own as a result would be staggering. And, as we have seen, the US financial industry truly has the everyday working stiff's best interests at heart.
WASF
Al
AIG, I Quit!
This letter was published in numerous newspapers. My initial reaction was sort of sympathetic to the man's words. However, with the opportunity to mull it over, I now feel more inclined to view it as the puerile bleating of a whiner. So, I decided to write back.
Dear Mr DeSantis:
When I first read your letter, my gut response was “Way to go, Jake. You told it like it is.” But, Jake, after finishing a cup of coffee and allowing my mind to wrestle with your words, my visceral and intellectual reaction is now, “So who cares, you self centered fool.”
Why the 180 degree turn? Well, for openers, you are not the only one in our country with whom an employer, the financial community (including AIG), his neighbors and/or the government have broken faith. It’s just that the numbers seem bigger when applied to your case. At least in your eyes. AIG not only broke faith with you, it broke faith with all of us. Perhaps not your specific division, but the company as a whole, and in the short run, you and your division reaped benefit from the actions of the whole.
Secondly, I find it interesting that your magnanimous offer is to turn the “post tax” proceeds of your bonus to “those suffering from the global economic downturn”. Is this an attempt to paint the government as the enemy, lest they tax your bonus too heavily and thereby punish those already victimized by the AIGs of this country? Prior to the public outcry, were you planning to be so beneficent? Does your offered contribution amount to the slightest drop in the bucket of damage that AIG and it’s fellow travelers have inflicted upon the common working stiff as they recklessly sought profits. Can you produce another letter, over your signature, calling upon AIG to be more prudent back when the seeds of this disaster were being planted.
As to those whom your recently proclaimed donation is said to benefit, are you aware of the relative difference between their current suffering and that which you express in the claim against your million dollar bonus? Will you lose your home and find it difficult to put a roof over your family's head? Will you be unable to afford routine health care? Has your retirement been wiped out? Or are we talking about a minor lifestyle adjustment?
Yes, Jake, you worked 10 to 14 hours a day, expecting to receive a million or so bucks for a year’s work. Others had to work the same hours, hoping to receive some 40,000 bucks, make ends meet and still have a job at the end of the year to start the process all over again. Actions of firms like AIG shattered the modest hopes of a couple of million of these folks, and you feel like you have been singled out for shabby treatment?
I wish you well, Jake, even if I find your whining repulsive. If you really want to impress us, divest yourself of all the wealth you have amassed, buy a middle class home, spend a couple of years working 10 to 14 hours a day at the median income, try to restart a retirement plan from scratch and then report back how righteous you feel.
Dear Mr DeSantis:
When I first read your letter, my gut response was “Way to go, Jake. You told it like it is.” But, Jake, after finishing a cup of coffee and allowing my mind to wrestle with your words, my visceral and intellectual reaction is now, “So who cares, you self centered fool.”
Why the 180 degree turn? Well, for openers, you are not the only one in our country with whom an employer, the financial community (including AIG), his neighbors and/or the government have broken faith. It’s just that the numbers seem bigger when applied to your case. At least in your eyes. AIG not only broke faith with you, it broke faith with all of us. Perhaps not your specific division, but the company as a whole, and in the short run, you and your division reaped benefit from the actions of the whole.
Secondly, I find it interesting that your magnanimous offer is to turn the “post tax” proceeds of your bonus to “those suffering from the global economic downturn”. Is this an attempt to paint the government as the enemy, lest they tax your bonus too heavily and thereby punish those already victimized by the AIGs of this country? Prior to the public outcry, were you planning to be so beneficent? Does your offered contribution amount to the slightest drop in the bucket of damage that AIG and it’s fellow travelers have inflicted upon the common working stiff as they recklessly sought profits. Can you produce another letter, over your signature, calling upon AIG to be more prudent back when the seeds of this disaster were being planted.
As to those whom your recently proclaimed donation is said to benefit, are you aware of the relative difference between their current suffering and that which you express in the claim against your million dollar bonus? Will you lose your home and find it difficult to put a roof over your family's head? Will you be unable to afford routine health care? Has your retirement been wiped out? Or are we talking about a minor lifestyle adjustment?
Yes, Jake, you worked 10 to 14 hours a day, expecting to receive a million or so bucks for a year’s work. Others had to work the same hours, hoping to receive some 40,000 bucks, make ends meet and still have a job at the end of the year to start the process all over again. Actions of firms like AIG shattered the modest hopes of a couple of million of these folks, and you feel like you have been singled out for shabby treatment?
I wish you well, Jake, even if I find your whining repulsive. If you really want to impress us, divest yourself of all the wealth you have amassed, buy a middle class home, spend a couple of years working 10 to 14 hours a day at the median income, try to restart a retirement plan from scratch and then report back how righteous you feel.
Tuesday, March 24, 2009
Too much freedom can be a curse!
As we old gits tend to do, my mind recently wandered back some 40 years to my days at Ft Wolters, Texas. One of the finer pieces of wisdom I received there was from the base pediatrician. He wrote a great series of parenting pamphlets, and in one, he addressed the subject of offering choices to our young ones.
His sage wisdom? Limit the choices your child is offered, and once they decide, hold them to it. His logic? If offered unlimited choices, one has great difficulty in evaluating them all to make a sound decision. Further, life will indeed involve limitations at times, and the sooner we learn this, the better we will be able to deal with it.
Thus, he said, rather than asking your offspring the seemingly innocuous question, "What would you like for dinner tonight?", he recommended offering a choice between two selections, one of which would be served to the whole family. Further, he said that such decision making should not be offered every night, but just often enough to involve the child in occasional family decision making.
In broad terms, the good Doc summarized that self discipline cannot be developed when we are allowed to be "children in the candy store with an unlimited allowance". (Credit cards were not in vogue at the time). And, he continued, the offer of limitless choices ultimately becomes a greater frustration when one suddenly bumps up against the notion of not being able to have all two, three or four that are "tied for first place". Doc posited that if the menu of choices is so expansive as to cause decision making to be virtual random guessing, no decision making skills nor sense of responsibility is developed.
If only the good Doc had been at the helm of our society the past 30 years or so. We are now at an economic crossroads where difficult choices need to be made, and all too many of us are angry for having to do so, no less unable to do so. The "all you can eat for $5 buffet" is closing, and no one wants to return to a fixed menu.
WASF
Al
His sage wisdom? Limit the choices your child is offered, and once they decide, hold them to it. His logic? If offered unlimited choices, one has great difficulty in evaluating them all to make a sound decision. Further, life will indeed involve limitations at times, and the sooner we learn this, the better we will be able to deal with it.
Thus, he said, rather than asking your offspring the seemingly innocuous question, "What would you like for dinner tonight?", he recommended offering a choice between two selections, one of which would be served to the whole family. Further, he said that such decision making should not be offered every night, but just often enough to involve the child in occasional family decision making.
In broad terms, the good Doc summarized that self discipline cannot be developed when we are allowed to be "children in the candy store with an unlimited allowance". (Credit cards were not in vogue at the time). And, he continued, the offer of limitless choices ultimately becomes a greater frustration when one suddenly bumps up against the notion of not being able to have all two, three or four that are "tied for first place". Doc posited that if the menu of choices is so expansive as to cause decision making to be virtual random guessing, no decision making skills nor sense of responsibility is developed.
If only the good Doc had been at the helm of our society the past 30 years or so. We are now at an economic crossroads where difficult choices need to be made, and all too many of us are angry for having to do so, no less unable to do so. The "all you can eat for $5 buffet" is closing, and no one wants to return to a fixed menu.
WASF
Al
Thursday, March 12, 2009
Sometimes an Education is Unsettling
My area of study, back when I thought a PhD would look nice following my name, was Labor Market Theory, particularly "Dual Labor Market" theory. There were basically two faculty/student "teams" studying the subject. Our team looked at the structural aspects, while the other looked at the sociological side.
To explain a bit. Dual Labor Market refers to a phenomenon in which there is a "Primary" and a "Secondary" Labor Market. Jobs turnover in the Primary market tends to be relatively stable, and earnings are strongly predicted by education level, years of experience, seniority on a job, etc. All those classic factors that instinctively pop into mind.
The Secondary market, on the other hand is characterized by high job turnover and very low earnings. The only statistically significant predictors of earnings are the prevailing minimum wage and hours worked. A PhD working in the secondary market will earn the same as a high school drop out. A person with 10 years on the job will not earn significantly more than the one hired yesterday.
While I was not seriously involved in the sociological side of the subject, several findings remain with me to this day. One was that if an individual works in secondary market jobs for more than two years, the odds of escaping that workforce diminish dramatically. Education, skill, training, and all the typical remedies for low earning do not work, unless it is retraining. For example, consider a graduate engineer with 10 years professional experience, who has to take a secondary market job(s) for a couple of years, perhaps due to a layoff. After about two years in secondary market employment, he suffers a high probability of remaining there. His probability of returning to primary market employment increased somewhat if he took, for example, a trade school course in auto mechanics and changed career fields, even if there were engineering jobs around. A career change was more promising than if he tried to return to engineering, even if he did more studies in engineering! In short, the Secondary Labor Market is the "Roach Motel" of employment.
As I said, my area of concentration was the structural side of the issue, so my insights into the sociology were limited. Thus, I can only offer the glimpse above. While this was back in the late 70's, early 80's, I can't help thinking about it today.
The good news is that if the above holds true, the laid off geniuses who brought this mess upon us might very well be flipping burgers for years to come! The bad news is that if middle class jobs stay off the radar for too long a period of time, many fine people may be trapped in their new found mess.
Another piece of bad news is that if people cannot readily return to a field where they have gained useful experience, that field loses the experience which they had gained. Sort of a brain drain.
Al
To explain a bit. Dual Labor Market refers to a phenomenon in which there is a "Primary" and a "Secondary" Labor Market. Jobs turnover in the Primary market tends to be relatively stable, and earnings are strongly predicted by education level, years of experience, seniority on a job, etc. All those classic factors that instinctively pop into mind.
The Secondary market, on the other hand is characterized by high job turnover and very low earnings. The only statistically significant predictors of earnings are the prevailing minimum wage and hours worked. A PhD working in the secondary market will earn the same as a high school drop out. A person with 10 years on the job will not earn significantly more than the one hired yesterday.
While I was not seriously involved in the sociological side of the subject, several findings remain with me to this day. One was that if an individual works in secondary market jobs for more than two years, the odds of escaping that workforce diminish dramatically. Education, skill, training, and all the typical remedies for low earning do not work, unless it is retraining. For example, consider a graduate engineer with 10 years professional experience, who has to take a secondary market job(s) for a couple of years, perhaps due to a layoff. After about two years in secondary market employment, he suffers a high probability of remaining there. His probability of returning to primary market employment increased somewhat if he took, for example, a trade school course in auto mechanics and changed career fields, even if there were engineering jobs around. A career change was more promising than if he tried to return to engineering, even if he did more studies in engineering! In short, the Secondary Labor Market is the "Roach Motel" of employment.
As I said, my area of concentration was the structural side of the issue, so my insights into the sociology were limited. Thus, I can only offer the glimpse above. While this was back in the late 70's, early 80's, I can't help thinking about it today.
The good news is that if the above holds true, the laid off geniuses who brought this mess upon us might very well be flipping burgers for years to come! The bad news is that if middle class jobs stay off the radar for too long a period of time, many fine people may be trapped in their new found mess.
Another piece of bad news is that if people cannot readily return to a field where they have gained useful experience, that field loses the experience which they had gained. Sort of a brain drain.
Al
Tuesday, March 03, 2009
Is the US Economy Sustainable?
For quite a while, I have felt that if the US economy was so dependent on consumer debt, there was no way it's growth could be sustained. Sooner or later, unless wages across the entire population rose more than the growth in GDP, the proverbial "minimum monthly payment" on consumer debt would surpass their ability to make those payments. In an economy such as the US, where consumer spending is such a major component of GDP, growth in consumer spending needs to be backed by growth in consumer real wages, or sooner or later, the house collapses. And it has.
I ran across an interesting article today. Someone seems to agree with my reasoning. I sure wish I was wrong, for my reasoning carried me to conclude that America needs a significant reset of its economy, and that means that either we accept a significantly depressed economy, or wealth must be distributed differently.
Note that I am not suggesting a "redistribution of wealth". But, somehow, more wealth needs to land into the hands of the masses for them to be able to spend without the assistance of excessive debt. In sort, if the rich keep getting richer and the poor keep getting poorer, the consumer spending of the rich will not support the economy. "Trickle Down" is pure horse-hockey.
Temporarily, however, as a result of the economy going over the edge, the only way to "prime the pump" of the masses' ability to spend is a redistribution of wealth, and Obama's tax policy is the only available tool in the tool box that can do that.
But, to get the rich to understand that they are better off in the long run to be slightly less rich requires a major culture shift. So far, all too many of them operate under the delusion that their personal well being is all that is needed for a robust society and economy. As more and more of the other 95% see that their economic well being is what really drives the economy, times in the US could get very interesting.
I ran across an interesting article today. Someone seems to agree with my reasoning. I sure wish I was wrong, for my reasoning carried me to conclude that America needs a significant reset of its economy, and that means that either we accept a significantly depressed economy, or wealth must be distributed differently.
Note that I am not suggesting a "redistribution of wealth". But, somehow, more wealth needs to land into the hands of the masses for them to be able to spend without the assistance of excessive debt. In sort, if the rich keep getting richer and the poor keep getting poorer, the consumer spending of the rich will not support the economy. "Trickle Down" is pure horse-hockey.
Temporarily, however, as a result of the economy going over the edge, the only way to "prime the pump" of the masses' ability to spend is a redistribution of wealth, and Obama's tax policy is the only available tool in the tool box that can do that.
But, to get the rich to understand that they are better off in the long run to be slightly less rich requires a major culture shift. So far, all too many of them operate under the delusion that their personal well being is all that is needed for a robust society and economy. As more and more of the other 95% see that their economic well being is what really drives the economy, times in the US could get very interesting.
Subscribe to:
Posts (Atom)