It has always been a dream of mine to own a cash only business. For a person of my
ilk caliber, that would mean a laundromat or a hair salon. IF I were to own a hair salon, it would be called Bob and Weave. It would be boxing themed (in case you missed it there in the title). Like a homeless man told me, a play on words is worth two in the bush. Too right, sir.
Ok, enough juvenile foolishness. We’ve got another Foreign Affairs article today. “The Impact of Globalization on Income and Employment,” by Michael Spence is the most recent farcical article from the esteemed publication. So let’s get into this piece, see if we can pull any interesting bits from this dry white paper.
I sincerely encourage everyone reading to click the link above to the actual article. Remember, most of cryptojournalism is taking things out of context and ferreting out bullshit. Do not take this as an honest interpretation. It’s cryptojournalism, so get your salt shakers ready.
Please note, this was published before the most recent tanking of the stock exchange. But since at least 5 of my 6 readers are too poor to own stock, that’s a moot point. Jumping right in:
By relocating some parts of international supply chains, globalization has been affecting the price of goods, job patterns, and wages almost everywhere. It is changing the structure of individual economies in ways that affect different groups within those countries differently. In the advanced economies, it is redistributing employment opportunities and incomes.
C’mere son, sit on grandpa’s lap as he tells a tale about the haves and the have nots. If you’re a little fuzzy with the paragraph above, it’s smoothly describing globalization as a vehicle for class warfare. Those ‘different’ groups of people are (spoiler alert) rich and poor. This is not very promising.
On the bright side, at least Spence is spot on concerning redistribution. He’d only be better off declaring it’s time for plebes to take up driving a gypsy cab, or webcamming for the ladies. I know, I know, the women reading this are shaking their heads. Webcamming? Yes, webcamming. Hey, when the economy consists of pushing paper at a financial institute, working in the vast service sector or being unemployed, why not venture into a liquid market, safe (for now) from the IRS. Setting up a web cam, PayPal account and mortgaging your dignity probably sounds pretty good to some people these days. Especially if you can’t get into the paper pushing racket.
Moving right along….
the structural evolution of the global economy today and its effects on the U.S. economy mean that, for the first time, growth and employment in the United States are starting to diverge.
Ahem, this is the FIRST time for a divergence of growth and employment? After a decade of flat growth for wages? The Economics Policy Institute has a nifty article FROM 2007?!!? touting how growth (strictly in wages) has been flat for 95% of Americans since the turn of the century. Take a look for yourself. It’s astounding that now, today, in the year 2011, we’re actually starting to see a divergence. I’m just going to call bullshit and trudge ahead.
Spence continues on:
major emerging economies are becoming more competitive in areas in which the U.S. economy has historically been
dominant, such as the design and manufacture of semiconductors, pharmaceuticals, and information technology services.
We’ve still got Mariah Carey, and nobody can take her away from us.
Yes, Mariah Carey. Put it this way: if you’re traveling abroad around the holiday season, you’re probably going to hear “All I Want For Christmas Is You” at some point on your journey.
In other words, we’ve still got entertainment. It’s our most reliable export: culture. That’s not going to change anytime soon.
Entertainment and culture are not real brick and mortar industries, though. Lucrative, yes. But not lucrative in a meaningful way. If that makes sense.
Hey, I’m grasping for something we export. Basketball, movies, Beyoncé…..uh, financial disarray and porno spoofs. All entertaining, yes. Not always necessary.
We’ve become so complacent our pornographers aren’t even trying. Choosing the above graphic was tough, since there are so many shitty spoofs to choose. Enough of that smut, we have important issues to discuss.
Before I get into this next blurb, allow a short rant. Writers and journalists of all stripes do an admirable job of pointing out the myriad problems surrounding whatever topic/issue they’re covering, but rarely have answers. Case in point:
…job opportunities in the United States are shifting away from the sectors that are experiencing the most growth and to those that are experiencing less.The result is growing disparities in income and employment across the U.S. economy, with highly educated workers enjoying more opportunities and workers with less education facing declining employment prospects and stagnant incomes.The U.S. government must urgently develop a long-term policy to address these distributional effects and their structural underpinnings and restore competitiveness and growth to the U.S. economy.
Radical. There’s a problem. “Distributional effects and their structural underpinnings” is the problem, but what’s the solution?
There are two possible solutions, neither of which is elaborated upon: a tax hike on that segment of the populace on the winning end of that income disparity OR a wholesale devaluing of the dollar. One could contend through quantitative easing we’re seeing that devaluing (gold bugs would tend to agree), but this is not addressed.
What good is an article on income and employment issues without solutions? Not bloody much.
Don’t fret. That will just make you think about things. And who likes thinking?
At least Mr. Spence gives some real information on the U.S. economy, specifically how it has grown over the last two decades:
Between 1990 and 2008, the number of employed workers in the United States grew from about 122 million to about 149 million. Of the roughly 27 million jobs created during that period, 98 percent were in the so-called nontradable sector of the economy, the sector that produces goods and services that must be consumed domestically.
Wow, what a buzzkill. 98 percent of the jobs created since ’90 are (no offense to workers nationwide) useless outside the United States. Now, watch this nifty trick of the tongue:
The retail, construction, and hotel and restaurant industries also contributed significantly to job growth.
He forgot to mention the reality television industry.
I’m going to go out on a limb and call that the service industry. Why the author is compelled to parse the service biz into specific components is beyond me, unless it sounds better to perceive these things as different. They’re not. They’re people serving other people.
Don’t worry, folks. The service sector is not the only part of the economy that’s grown:
Employment is growing, however, in other parts of the tradable sector-most prominently, finance, computer design and engineering, and top management at multinational enterprises.
All you’ve got to do is ditch that shitty job at Zumiez and become a top manager at a multinational enterprise. No big whoop. Ok, maybe it’s a medium whoop.
Ready for a truth bomb dropped on your head? If you’ve got a bomb shelter, I’d advise taking your laptop down there before reading this next passage:
the range of employment opportunities available in the tradable sector is declining, which is limiting choices for U.S. workers in the middle-income bracket.
And there it is, laid bare for all to see. Like Lenin’s body. You’re a worker in the middle-income bracket in America? Well, soon you’ll be a copper thief. Or a gypsy cab. Or doing the aforementioned webcamming. Because your choices are limited. I’m only speaking slightly with the slightest twinge of hyperbole.
As a random (and generally unread) blog, I’ve got to go fishing for page views. Honestly, who WANTS to read something from a cryptojournalist? So I try to link to articles featured on The Drudge Report. And boy, Matt Drudge loves articles about copper theft. It’s like a trend or something. For criminals.
I’m beginning to see a trend emerging in this article. Most everyone is getting crunched. Except the highly skilled or
morally bankrupt financial wizards. I imagine Mr. Spence chuckling as he actually states things clearly:
The overall picture is clear: employment opportunities and incomes are high, and rising, for the highly educated people at the upper end of the tradable sector of the U.S. economy, but they are diminishing at the lower end. And there is every reason to believe that these trends will continue.
Sorry to burst the bubble of everyone reading this with a Masters Degree, but he’s not talking about you. Highly educated people get their MBA, not a teaching degree. They study at MIT and Harvard, not University of Phoenix or Hamburger University.
Sorry, thought I had a zippy graphic for Hamburger University.
This wouldn’t be cryptojournalism if I did not take umbrage with some of what Spence lays out in this article. Look again at that last quote above. It’s misleading, but it’s so soft and subtle that it’s very easy to gloss over. Specifically, his use of ‘at the lower end’ needs to read ‘everyone else.’ I’m at a loss for a zinger, so let me hand this one off to Maude Lebowski.
With our SAT word of the day out of the way, we can get back to the cruel joke education plays in the American economy:
The highly educated, and only them, are enjoying more job opportunities and higher incomes.
Well, the highly educated, and the Kardashian Klan. Mr. Spence keeps forgetting the reality stars who’ve made it big. I cannot overstate that a Masters Degree DOES NOT QUALIFY one as ‘highly educated.’ Post graduate is the game here, which in stunning turn of events, costs money to acquire. Yup, you’ve just been zung.
Now let’s touch on one of my favorite aspects of cryptojournalism, which is calling out misleading qualifiers:
[the global economy’s structural evolution]…is creating a distributional problem in the advanced economies. Not everyone is gaining in those countries, and some may be losing.
Some, not most. May be, not are. Sleight of hand, not lying. I think you see my point. It gets better:
Declining employment opportunities feel real and immediate; the rise in real incomes brought by lower prices does not.
Lower prices? Where? In Venezuela? I guess that the 15% rise in food costs the World Bank reports took place between October 2010 and January 2011 is poppycock. Fuck, even the United Nations admits a 39% bump in food costs from June 2010 to June of this year. In which fantasy realm does the author of this article reside? Asgard? Big Titty Heaven from South Park? Where can I buy a slice of pizza for $1.25?
If you’re going to deceive, try a lie that’s not so easily refuted.
This passage is what I like to consider cute, in a ruthlessly cutthroat sort of way. It’s a bit of truth with some deception, baby:
according to recent surveys, a substantial number of Americans believe that their children will have fewer opportunities than they have had. The slow recovery from the recent economic crisis may be affecting these perceptions, which means that they might dissipate as the situation improves and growth returns. But the longterm structural evolution of the U.S. and global economies suggests that distributional issues will remain.
We’ve already shown that growth, well, didn’t grow for the overwhelming majority of Americans. But don’t fret. As soon as these stupid perceptions dissipate, it’ll be back. And better than ever!
Don’t be fatuous, Michael.
At least he has the nerve to couple that with the factual statement that people believe their children are being shafted.
So, uh, what exactly is crippling the economy in slow motion? It’s not technology or multinationals, that’s for fucking sure:
If giving technology as the preferred explanation for the U.S. economy’s distributional problems is a way to ignore the structural changes of the global economy, invoking multinational companies (mncs) as the preferred explanation is a way to overstate their impact. Mncs are said to underpay and otherwise exploit poor people in developing countries, exporting jobs that should have stayed in the United States.
I hope this paragraph is dripping with sarcasm, and it’s jut lost in translation from statement to print. For one, shrinking multinational companies into an acronym is simply adorable. I’m also fairly certain there should be air quotation marks around “said to underpay and otherwise exploit poor people in developing countries,” but that’s just a hunch.
Now here’s something which is so painfully obvious, it almost hurts to type:
In short, companies’ private interest (profit) and the public’s interest (employment) do not align perfectly.
Oh, that’s it. The alignment is off. I’m not even going to throw an axle joke out there. That’s too easy. Once again, I’m fairly certain there are ironic quotation marks that should be around “align perfectly,” but I never can tell what’s irony and what’s mere farce.
Know what I was saying about misleading qualifiers? Here’s a doozy. Warning: this is a half a quote taken completely out of context. Still, it’s too funny to pass up:
…the risk of a second economic downturn…
Silly me. Here I thought it was one long, slow decline. Nope, we had a rebound there, and now there is a RISK of a second economic downturn. I don’t need to rub the Dow Jones in the author’s face. He probably realizes how dumb that sounds now. Especially when that risk is biting the stock market on the ass.
With considerable uncertainty about the efficacy of various policy options, a multistakeholder, multipronged approach to addressing these distributional problems is best. The relevant knowledge about promising new technologies and market opportunities is dispersed among business, the government, labor, and universities, and it needs to be assembled and turned into initiatives. President Barack Obama has already appointed a commission, led by Jeffrey Immelt, the ceo of General Electric, to focus on competitiveness and employment issues in the U.S. economy. This is an important step forward. But it will be hugely difficult to invest in human capital, technology, and infrastructure as much as is necessary at a time of fiscal distress and declining government employment. And yet restoring opportunities for future generations requires making sacrifices in the present.
We’ve got business, the government, labor and universities with seats at the table. How about, oh, I dunno, regular taxpayers? Some shmuck off the street? Feh, what do they know?
Here’s a zinger, plain and simple. Nothing more, nothing less:
Improving the performance of the educational system has been a priority for some years, yet the results are in doubt.
‘Bout that highly educated workforce. Where is it? Seemingly not coming from most educational institutions domestically, according to Mr. Spence. He doesn’t just throw wild statements out there. He backs them up with vague almost statistics, but, well, without the numbers:
…the Organization for Economic Cooperation and Development administers a set of standardized tests, the Program for
International Student Assessment, across more than 60 countries, advanced and developing, to measure the cognitive skills of teenage students. The United States ranks close to the average in reading and science and well behind most countries in math.
Close to average….is that above or below? Vague and generally useless. It’s like I hit the cryptojournalism lottery! Once again, we’re confronted with problems, but no solutions. Oh, there are suggestions. Hilarious suggestions.
And when I say hilarious, well, see for yourself:
To break this pattern, it will be necessary to shift communities’-and the country’s-values about education through moral leadership, at both the community and the national levels.
Moral leadership. Good thing this is an article and not a speech, since I doubt anyone could say that with a straight face without bursting into hysterics. All along, all we’ve needed is moral leadership (from the national level!), and our students would magically be better performers at reading, math and science.
So I have this bridge in Brooklyn for sale, I sez.
One last tidbit, then we should have this wrapped up tightly:
Mncs with earnings outside the United States currently have a strong incentive to keep their earnings abroad
and reinvest them abroad because earnings are taxed both where they are earned and also in the United States if they are repatriated. Lower tax rates would mean a loss in revenue for the U.S. government, but that could be replaced by taxes on consumption, which would have the added benefit of helping shift the composition of demand from domestic to foreign.
I may be mistaken, but wouldn’t consumption taxes, I don’t know, fall on consumers? Sounds like just another way ‘the lower end’ would get fucked over. Yes, the author claims that the burden would be shifted to some foreign entity. He also claims we’ve got low prices.
Like I try to do with many of these articles, I want you to think about what you’re reading. If you’re reading. Often, you’ll find the most egregious lies are balancing on a qualifier, or a quip. Keep your eyes open and your brains sharp. Even if you can’t afford to be highly educated.