Business Devours its Young: Lessons from the Great Depression: Part V: Destroying the Working Class.
The deflation versus inflation debate is a hotly debated one. If we are to look at the Consumer Price Index as our guide to inflation, we can see that yes by this measure inflation is increasing. Yet if we are to look at wages and housing prices, deflation is occurring. What gives? Well the narrow definition of inflation is an increase in the money supply. Looking at momentary measures we do not have inflation. But looking at the current news cycle and what is going on, we are approaching Great Depression like scenarios. In this two-piece article, we will first discuss the current assault on today’s market with job declines and wage decreases followed by a disturbing article posted in 1933 examining the new business climate that emerged during the Great Depression. General Motors is offering buyouts to many longtime workers to replace them with new younger workers for half the hourly wage. The state of California is putting hiring and income freezes and laying off workers. Do these things sound inflationary? Take a look at the GM plan:
“DEARBORN, Mich. (AP) – About a quarter of General Motors Corp.’s hourly work force represented by the United Auto Workers could leave the company under a new round of buyout and early retirement offers, the UAW president said Thursday.
President Ron Gettelfinger estimated that 15,000 to 20,000 GM workers could take the packages, but said they all must be replaced under terms of the UAW contract deal reached with the company last year.
GM is offering buyout or early retirement packages to all 74,000 of its UAW-represented workers.
Most of the replacement workers, he said, will do non-assembly jobs and be paid at a lower wage scale, which is about half the $28 per hour that average hourly workers now make.
GM has about 46,000 hourly workers eligible for retirement incentives, but Gettelfinger said that economic uncertainty could hold down the number of workers leaving.
Many of those who have taken a previous buyout have found that it didn’t meet their expectations, Gettelfinger said, while others have found leaving very beneficial.
“I just think that it’s dependent on each person’s situation,” he said. “If you just look at the economy overall, everybody’s concerned about right now whether we’re headed into a recession. You’ve got the subprime issues. You’ve got tight money markets out there. So a lot of things have changed in people’s lives.”
The actual package looks to be about $100,000:
“Chrysler is trying to cut up to 21,000 of its 45,000 U.S. manufacturing jobs, giving workers on temporary or indefinite layoff up to $100,000 to sever ties with the company.”
After taxes this $100,000 comes out to be about $60,000. Now as you know, the economy of Michigan isn’t doing so well and a family can blow through $60,000 in one year. If you have many more years to work and have a mortgage, you are stuck since some homes have been on the market for as long as two years. The state of California isn’t doing so well either as the Los Angeles Times is reporting:
“The Long Beach school board voted to close an elementary school this week. The Rialto Unified School District, in what is believed to be the first such action in the state this year, sent notices to 305 employees including teachers, informing them that they may not have a job next fall. The San Francisco school district may take city “rainy day” money to help balance its budget.
School districts across California have begun trimming services and preparing to lay off teachers in response to Gov. Arnold Schwarzenegger’s proposed budget, which could cut about $4.8 billion in education funding this year and next year. Educators say it’s the worst financial crisis they can remember.”
What this means is more unemployment, a smaller tax base, and less consumer spending. What really amazes me is the general disregard for manufacturing. We have allowed our entire manufacturing base to be off-shored and many try to show blue collar workers in a negative light as milking the system. My father was a blue collar worker and I can attest as I’m sure many of you can, that blue collar labor is not an easy lifestyle and many do earn each and every penny. My amazement is in how society has no problem with a mortgage broker pushing papers and making $100,000 with a GED while a GM worker assembling cars all day with overtime making $100,000 is somewhat living on the gravy train. How can we as a nation have lost perspective on the value of actual work? Did we somehow think that flipping homes was going to prove to be the highlight of our economic prowess? The banking and real estate industries are fighting with all their might for every single kind of bailout imaginable. Now in an incredible sense of irony, a group of banks are rumored to offer a bailout to the monoline insurers:
“Ambac Financial Group Inc., the bond insurer facing a crippling credit-rating downgrade, may get $3 billion in new capital as part of a rescue agreement with banks, according to a person with knowledge of the discussions.
An announcement may come early next week, said the person, who declined to be named because no details have been set. The New York-based company rose 16 percent in New York Stock Exchange trading yesterday after CNBC Television said Ambac and its banks were preparing a deal.
A rescue that enabled Ambac to retain its AAA rating for the municipal and asset-backed securities guarantees would help banks and municipal debt investors avoid losses on securities it insures. Banks stood to lose as much as $70 billion if the top- rated bond insurers, which include MBIA Inc. and FGIC Corp., lose their credit ratings, Oppenheimer & Co. analysts estimated.”
The market desperate for good news reversed a triple digit loss in the last hour to end higher by 90+ points. Think about how insane the above proposition is. This is like you getting into a car accident, calling your insurance company, and having them tell you that you need to loan them some money in order for them to help you out. It is absurd and I don’t see how the above gets going without splitting the company up and allowing muni-bonds to work on their own. What this means is that they still will collapse because absurd CDO involvement and subprime Wonderland investing. In a sign that even the muni side may have problems, we have our first city in California looking at a potential bankruptcy:
“As Vallejo gains the dubious distinction as one of California’s few municipalities to consider bankruptcy, the city’s fiscal plight is gaining widespread, even national attention.
City bankruptcy attorney Marc Levinson, Orrick, Herrington & Sutcliffe, said many cities face dire financial conditions, and are watching Vallejo closely.
If the city does file for bankruptcy, Levinson said Vallejo could be a first to seek protection due to revenues being unable to keep up with expenses.
“This would be one of the first where there’s a systemic problem – where there’s no revenues to cover the expenses,” Levinson said.
“That’s why people are following this. It could be a first,” Levinson said. “There’s simply not enough money to go around.”
City and union negotiators have been involved in marathon talks, which are expected to continue over the weekend. Mayor Osby Davis said Friday afternoon that the two sides have “an agreement to agree,” but provided no specifics. (See related story on A1.)
The city is grappling with a $6 million shortfall in its $91 million general fund. Though Vallejo started the fiscal year in the black, expenses have outpaced revenues by $10 million and every penny of the $4 million in reserves.”
Not enough money to go around is correct. Apparently cities are taking a note from our federal government spending more than they earn.
Lessons from the Great Depression
With all this news, I came across another ominous article from Harper’s Magazine called “Business Devours its Young” talking about the new business psychology that permeated the market in 1933. This article offers a minor glimpse to where we are heading and given our massive overspending for a decade, there is simply no way of avoiding a correction. This issue of Lessons from the Great Depression is Part V in our ongoing series:
*A story from a lawyers perspective highlighting the societal impacts of foreclosures. Many things are eerily similar to what we are currently entering into.
2. Lessons From the Great Depression: A Letter from a former Banking President Discussing the Bubble.
*With the current corruption on Wall Street and shady rogue traders, you have to wonder when are good bankers going to step up to the plate?
3. Florida Housing 1920s Redux: History repeating in Florida and Lessons from the Roaring 20s.
*Looking four years into the future from the infamous 1929 stock market crash. Mortgage bailout plans look very similar to things we did nearly a century ago.
Business Devours Its Young
“As I was walking up the street from my office the other evening, young Norcross fell into step with me. Norcross is a minor executive in the local office of a large manufacturing concern. From my causal acquaintance with him I had considered him generally good-natured; but tonight he was clearly in a black mood.
“I’m sore,” he burst out, almost before I had time to greet him. “I’m good and sore. I’ve just had my third salary cut in three years.”
Thereupon, as if under an overpowering compulsion to unburden himself to the first sympathetic listener, Norcross poured forth his story. He had been engaged by his company in 1924, at a salary which seemed to him very low, but which he was willing to accept in view of the company’s assurance that it was merely provisional and that if he did satisfactory work he would be “in line for an early raise.” He did satisfactory work; the proof of this, he told me, lay in the fact that his duties and responsibilities were steadily and rapidly enlarged. The promised increase in salary, however, was long deferred; there were always reasons, it seemed, why a change in the budget of his department was “impracticable at the moment.” He was given a small raise in 1927 and another in 1929, but by no means what he had been led to expect. Meanwhile he had slaved hard, working till six or seven night after night and taking work home with him; he had not simply done the duties which were set for him, but had genuinely devoted himself to the company’s interests. Again and again he and the other employees had been told that if they redoubled their efforts “they all would prosper”; and always he had felt that a substantially larger salary was just over the top of the next hill. “They said there was a promising future for me there, and I was simple enough to believe them.”
Then came the depression and three big salary cuts – though the company was still managing to pay its dividends. “Now I’m getting twelve per cent less than when I started in 1924,” exploded Norcross, “though I’m doing nearly twice as much work as I did then, and I know I’m worth three times as much. And at that,” he added savagely, “I suppose I’m luck to be there at all – they’ve thrown three whole departments out the window in the past eighteen months.
“Don’ misunderstand me. It’s not being hard up that gripes me, though I’ve had to borrow to pay my insurance premium this month, and that’s no fun. What really hurts is realizing that I’ve been played for a sucker, right from the start. That stuff about loyalty to the company was just so much applesauce – and I swallowed it. I kept on swallowing it even when my raise was held off with lame excuses. I guess you would have, too, if you’d heard old Thompson talk in our pep-meetings. Now I see it all for what it was – a skin game. I’ve been gypped. It’s perfectly clear to me now what the policy of pretty nearly every company is: Hire them cheap, keep them in line with soft talk, tell them they’re partners in a great enterprise, and then when the enterprise needs a little cash and you have them at your mercy, forget all the partnership stuff and soak them. Of course Thompson has me by the short hair now, because he knows I don’t dare get out, jobs being as scarce as they are this winter. But what wouldn’t I give to wade right into his oak-paneled office and tell him what I think of him! Believe me, it would singe the hair off his head.”
Couple of things here. What we are seeing with GM is only one example of the above company tightening and protection of dividends at the sake of workers. There is a great divide in this country. From the top 5 percent and the other 95 percent. I remember a pep-talk in our real estate office and how a running tally was kept on a white erase board. Everyone thought the office had loyalty to them and now, as they are cutting back many now find themselves finding other work. In fact, this is a great gig for those receiving monthly membership dues. Many broker offices hire agents and don’t pay them a nickel since they run completely on commission. They split the profit with you. All those signs “of prices always go up!” and “sell them fast!” can make someone leave quickly if they don’t believe the hype. Where are all those touting real estate as the place to make millions overnight? They are fad sellers and how many of those were out there touting the housing market and now are hidden in the shadows? No apologies for creating the new assembly line of the century; a fleet of brokers, agents, Wall Street banks, and builders that invested this entire belief that housing was somehow the way to eternal wealth. Now we’ve sold out our manufacturing base and even our gambling in houses is coming to an end and we are faced with the reality that we need to retool our economy or face having foreign nations buy up our banks and most important national interests. The article continues:
“Even during the boom years there were many storms upon the seas of business, and men and women who had tied up their hopes with corporations which employed them were constantly being betrayed by harsh circumstances. But not until the depression was there a wholesale breakdown of the structure of faith. During the past three years the number of Norcrosses and Smiths has multiplied many times.
Since 1929 they – and executives too – have had to face, however unwillingly, a hard fact: that as business is now generally organized, when earnings fall off the employees are the first to suffer. The president of the Gadget Manufacturing Corporation sees that the estimated earnings of his company for the month are sixty thousand dollars less than in the corresponding month of the last year; and whatever he may think about the personal fortunes of Norcross and Smith, his cold business sense tells him that, according to the principles now accepted in the business world, his first duty is tot protect the return on the company’s bonded indebtedness and its position with the banks, his second duty is to protect its preferred dividends, his third duty is to protect its common dividends, and not until all these duties have been discharged may the men and women in the office or the factory be taken into consideration. Unless he is a particularly conscientious executive, he is activated also by a natural selfish motive: the motive to “make a good showing” and thus maintain his own reputation as a canny business manager. If he shows his directors a statement of declining earnings, they may begin to wonder if he is awake to the emergency. They will want to see the missing sixty thousand dollars made up.”
We need only look at the current CEOs and titans of industry and their severance packages to see how well we compensate people that push financial products that have financially crippled our economy and have diverted resources from more productive measures. What are these measures? Well I’m certain we can find something more useful then selling each other houses ad infinitum. Yet the above shows that massive disconnect from Wall Street to Main Street. Even now with the current bailout talks, they are not looking out for homeowners in middle America who have lost their jobs and are falling behind on modest mortgages but want to bailout the religion of housing greed with those who took out jumbo mortgages on the pretense that housing always goes up. There is no money to be made on helping someone that is behind on a $90,000 mortgage. But someone with a $1 million mortgage? The current housing oversight arm OFHEO has such a small and pittance budget that of course they are setup to fail. Now these hands-off banks want corporate welfare from the government in bailing out their stupid decade long investments. Then we call up Washington. For all those that think somehow government regulation at its most basic level is socialism, these red herrings were thrown out in the 1930s as well:
“I have heard it predicted that this embitterment will drive disappointed employees into the ranks of the communist and socialists; that they will resolve that “the capitalists must be kicked off the back of labor,” and off the backs, as well, of the lesser executives and other office workers. So far there is no sign of such a change, and there seems to be little immediate prospect of it. An observant employer whose company was forced to put through three drastic economy measures in 1931 – cutting salaries and twice dropping considerable bodies of employees – told me that each of these measures visibly hurt the morale of the office for a week or ten days, but that after an interval the staff appeared to work with as keen an eye for the company’s advantage as before. “The capacity for loyalty and for hope is so strong in most of us,” this employer told me, “that it will survive almost any number of shocks. I’ll wager that even your friend Smith, if he gets a new job and business picks up, will pretty soon forget everything he said about refusing to have his leg pulled; he’ll be putting his back into his work as if the success of the company were the most important thing in life to him.”
The important consideration is that we will manage with the credit crunch. The problem we are facing is one of conspicuous consumption. Many Americans being addicted to credit for their lifetimes have a fear of cutting down because an unknown world awaits them. We have survived embattled times. In fact, after the Great Depression the greatest generation emerged. Will this greatest generation step up and usher in a path for the younger generations to have a chance for the future or will they only look out for themselves? This question will come up in the next few years and we may start seeing the tinge of generational warfare taking seed. Unless younger workers perceive a fair shake in the future they will resent what is going on. How can it be that a young professional couple cannot afford a home when only a few decades ago one blue collar wage earner was able to buy a modest home? How can it be that younger professionals pay a higher percentage into Social Security and are being told it will not be there for them when they retire? The buck is now stopping and we have hard choices to make. No longer can we push aside these issues simply because they are third rails in politics. These issues will force many hard decisions. Let us now look at the final portion of the article:
“The moral argument is as strong as the economic. Let us consider the man who is being paid a $5,000 salary by his employers as representing a human investment of $100,000 earning a five per cent return. Balance this man, his hopes and fears, his family, his responsibilities, his children’s education, his position in the community, against a common-stock investment in the company of $100,000, likewise earning a five per cent return. Suppose we have to decide which of these investments shall be penalized by reducing its return from five per cent to four, or to zero. Can there be any doubt that the investment in flesh and blood should be allowed to remain intact, that the social damage done by penalizing it is likely to be far greater than that done by penalizing the paper holding in common stock? Which investment is likely to be of paramount importance, financially, or spiritually, to the holder? Remember that it is the general practice among owners of common stock to diversify their holdings, and that usually they have other resources than their common stock, whereas in a majority of cases the employee’s whole career and all it represents to him are involved in his job, and the loss of it may immediately bring him and his wife and children to grips with poverty. I believe that in ninety-nine cases out of a hundred any fair-minded person who knew personally both the holder of common stock and the employee whose fate hung in the balance, and was able tot foresee just what the effect of an adverse decision would be upon each of them, would vote to let the stock-holder carry the immediate loss.”
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19 Responses to “Business Devours its Young: Lessons from the Great Depression: Part V: Destroying the Working Class.”
Very timely. I just got my (glowing) performance review from a large company last Friday with a meager raise (around 3%)…the same day the company announced that they spent between $50 and $75 million to rename a local racetrack over 10 years.
Very motivating, to say the least.
Sorry, no sympathy from me. In the early 1980s, I had two things of note happen to me vis a vis the US auto industry and the UAW. My first experience was a trip to the local (RTP Area of NC) to look at and finally purchase a Cadillac. After being prepped and having some door moulding straightened, I drove it home where upon I noted that whenever I crossed some railroad tracks or hit some rough pavement there was one hell of a clatter in the passenger side door. I took it back to the dealership and a manager hoped in for a test ride with me. Yep, trouble in River City. They took off the door to find a coke bottle with a note in it. The note read: Well you rich s*n of a b**ch, I see you finally found it. The car went back to the dealer and I bought a Mazda. The second experience was with the near do well brother of a rather pretty nurse I was dating who had come down to Chapel Hill to see his sister. He had gotten out of a short prison term for auto theft, but he had something I didn’t…a job with GM. He was making roughly twice what I was making as a cancer researcher here in the RTP and was bragging that he loved layoffs and down time because he got 95% of his take home pay whether he was working or not. You won’t find any sympathy from me for american union guys. Killed the goose that laid the golden eggs! Tough!
You’re certainly causing a depression in me.
Reminds me of the Simpsons episode, where Grimesy the nuclear technician – “I live above a bowling alley … beneath another bowling alley” – is aghast at the freeloading of Homer – family, kids, big house, lobster for dinner: the full gamut of entitlement.
In the end Grimesy commits “accidental” suicide. As his coffin goes in to the ground a snoozing Homer cries out, “Marge, change the channel!” The mourners laugh: “Good ol’ Homey!”
Very dark.
i generally agree with most of your posts, and i liked this one. however, i’d like to chip in my two cents worth about the notion of “inflation” running rampant in the national/global economy and reducing living standards in the US.
what is going on with global commodity prices is not inflation. inflation is a monetary phenomena that is driven by the production of fiat currency. more notes in circulation, with a higher velocity, drives the general price level higher with no corresponding change in output.
the current upward trend in commodity prices is a real price signal, not a sign of incipient inflation.
since WWII, the US has been the dominant economy in the world. we have consumed a much larger share of global economic output than one would expect in a more “rational” world. the reasons are many, but it basically boils down to competence – our entrepreuneurs, managers and elected leaders built an economic system that was much more efficient and profitable than our competitors. this allowed us to grow more quickly than everyone else, and enjoy a much higher standard of living. in fact, the periodic recessions/depressions that impacted other major economies (e.g., Europe’s lost decade, the collapse of the Eastern bloc, Latin America’s lost genreation, etc) had the effect of depressing commodity prices – and benefiting the US – since we were in effect the marginal buyer of resources in a world plagued with oversupply.
the situation is vastly different today. the BRIC’s (brazil, russia, india & china), the gulf states, and many other emerging countries have discovered that capitalism works. there are literally 5 billion people around the world who are demanding a better life for themselves – something akin to what they see on TV – and local entrepreneurs are figuring out ways to deliver the goods (literally and figuratively). this is putting incredible strain on resource endowments worldwide. we are no longer in a period of excess supply; instead, we’re in a period in which marginal demand far exceeds marginally supply.
most people would agree that the best way to allocate scarce resources is through the market. but that means the beneficiaries of the excess capacity of the past 30 years face a day of reckoning. and guess who that’s been? the mid/low end US consumer who has enjoyed the benefits a positive deflationary spiral for virtually their entire lifetime. they’ve always known abundance, hence they’ve been willing to do many foolish things with their savings (speculate on stocks, houses, take out too much debt, etc). they’ve never known privation and hence have none of the risk aversion that is prevalent in more volatile economies.
we are in the early innings of a dramatic reorganization of global economic activity that will be good for the 5 billion at the bottom, and “bad” (in a relative sense) for the 1 billion at the top. food prices are going to go up as emerging market citizens acquire a taste for meat. cheap airfares are going to fall by the wayside as the global auto and air networks are built out in emerging markets. excess retail capacity in the US and europe will slowly disappear as cheap imports from china and india gradually dry up. houses will get smaller and less ornate as steel, lumber, copper and other materials are diverted to infrastructure projects in emerging markets. along every important dimension of economic life, the US consumer is going to consume less in the coming generation than it has in the current one.
i think your insight is correct that the relative living standard of americans is going to go down. reduced consumption on the back of a high debt burden may have something to do with it, but i don’t think it will be the driving force.
the biggest reason to be bearish is the global competition for resources that is beginning to play out. to put it simply, the past generation of US middle class prosperity has been at the expense of middle and lower income individuals in emerging markets around the world. those consumers are tired of subsidizing our lifestyle and have decided they want it for themselves.
so in summary, rising prices do not signal inflation. they signal a very real resource shortage that’s only going to get worse unless significant investments are made to increase global production capacity. and unfortunately it’s not something that lower house prices or higher wages (and lower corporate profit margins) will fix.
Hi Dr. HB,
great article as always. Good to hear something positive written about blue-collar workers. The unions allowed working people to become part of the middle class, and become consumers which supported our manufacturing base. Too many people have nothing but contempt for folks who earn their $ . All too typical are apocryphal stories like “americansRdeadbeats” idiotic tale. Finance capitalism/stock market/housing speculation is not the real economy. The real economy produces real wealth, throughout history great nations have neglected their base, their infrastucture for foreign investments and have paid the price for it. Apparently this is our fate too.
very nice comprehensive article, thanks!
i think it’s too often forgotten there were reasons workers gathered together to protect themselves from literally life threatening conditions
that it’s equally true that investors have more recently had to gird themselves from excess demands speaks more to the need for balance than either/or
thanks again,
adan
http://www.adanlerma.com
If ‘Detroit’ is a symbol of American manufacturing ( or anything else) we are in a bad way, but I’d say Detroit represents a failed ideology now being resurrected by the Democrat party. Big Government, Big Business and Big Labor working hand in hand to produce an inferior uncompetitive product, city and way of life. I note that GM’s overseas units do very well as do Japanese and German car plants in the US. OK, they only pay their assembly line workers $20/hour and ask them to show up for work but $20/hour is good money in the rural South where your mom and dad may have made less than half that working at a textile
mill or furniture factory but Toyota can’t seem to produce enough of those Solara
Convertibles and I just bet the Tennessee? workers turning them out are getting all the overtime they want so its not as if American workers can’t produce good products if they have a company willing to design them. America is still the technological leader of the world though, if I were to make a complaint it would be that our educational system ( also liberal dominated) at the top end turns out way too many lawyers and MBAs and not enough scientists, doctors and engineers but that too maybe a systemic problem. Our primary and secondary schools don’t have enough good science and math instruction and instructors. They do have lots of NEA members though.
Left unchecked, the current trend of offshoring every possible job in the country will eventually leave millions unemployed in the US. Entire industries will disappear from North America. And this time it’s not just blue collar. Every white collar job that exists is in jeopardy. If you’re not a CEO or independently wealthy, you’re livelihood is on the line whether you realize it or not. With very few exceptions, everyone can eventually be replaced by someone else willing to work for a fraction of your pay. The people that make these decisions should be aware that actions have consequences. Rightly or wrongly, millions of unemployed people will eventually force some sort of response. The cure may be worse than the ailment but that’s how things go. I’d hate to see true communism take hold here simply because today’s CEOs are too greedy, too shortsighted, or just too stupid to see how this could play out over the next generation.
Another angle you might consider reporting on is utility vs. cost of land. Whenever the cost far outstrips the lands utility to support the cost, the economy gets into serious trouble. In terms of commercial property in southern california for instance, one has to do a serious volume of business to sustain the cost. The same is true for wage earners and home payments. I agree that retooling our economy is necessary, however, the land costs make most ventures unfeasable. Even more so in a contraction. Its really quite remarkable that this was allowed to go so far.
>way too many lawyers and MBAs and not enough scientists, doctors and
>engineers but that too maybe a systemic problem. Our primary and secondary
>schools don’t have enough good science and math instruction and instructors.
>They do have lots of NEA members
People go into law because there are TV shows about it. L.A. Law was the first and it sparked a major increase in applications to law schools that never slowed down because shows continued to be produced about attorneys. 2nd, because you clearly haven’t read anything about how this actually works so I will point out the obvious just in case, total admissions to medical schools is set by the AAMC. They control how many doctors there will be in the future in the U.S.
If you want more scientists it would help if conservatives would stop misrepresenting, if not outrightly demonizing, science and the scientific method, and would consider possibly even including it in the nation’s priorities (i.e, no child left behind, certainly left science behind). It isn’t a liberal president who is ignoring school science at the federal level right now. It isn’t liberal parents who fly off the handle when schools or news articles discuss evolution. I’m sure that encourages their kids to go into science. *rolls eyes*
There are a handful of TV shows that sort of glorify engineering (Mythbusters and Smash Lab) if not tinkering, perhaps they will help get kids to consider engineering. There were some great outreach programs in high schools and middle schools that were working well in the seventies to attract minorities and women into engineering in anticipation of a crippling shortage, but the Reagan administration cut them and the number of applicants plummeted through the 80s. Outreach (taking demos into schools and engaging kids and providing role models) works wonders, but costs money, which is unacceptable to conservatives, even as an investment in the future.
Last time I looked emmi, public school systems are run at the local level, not in Washington. They are funded at the state and local levels too with Washington paying for just a minute portion of total primary and secondary costs to include such failed programs as Head Start.
Truly startling. Scott, where do you think the money for local schools comes from? Washington sets the rules in the abysmal No Child left behind act that forces schools to make their students pass the test, not actually learn anything, or the school loses its funding. The program is a raging failure—-ask any teacher or school executive. Instead of strengthing our schools, its has gutted any independent ideas or actual learning. The numbers speak for themselves. Why else did the Mississippi school board redesign the test when the majority of students didn’t pass the last one? If it wasn’t for “liberal” ideas, like art and music, we would still be living in caves. Its also been proven that those same classes lead to smarter students and higher grades. Just how many conservatives are becoming scientists? And why should they, when scientific data has been ignored or re-written by the current administration to fit their own agenda?
If the quality of debate I am engaging in here on how public schools are financed
is any measure of A. the knowledge of our public school employees or B. the level of education they have passed on to their students, we are in for a world of hurt! No wonder the housing market is overwhelmed with problem loans. If the public doesn’t understand how its schools are financed is it any wonder they cannot understand how their house is? Sheesh, and then to point to a curious but legitimate debate over whether life was the result of ‘spontaneous creation’ , once the biblical POV, or ‘intelligent design’ the new religious POV as being illegitimate and thus confirming ones own ‘scientific’ credentials is remarkable. I know of now ‘evidence’ the debate has been settled one way or another except by those who do not wish to debate it!
This is a timely comparison of two eras. With baby boomers retiring, a credit crunch, housing crisis and a cooling economy it is hard to argue for more inflation. If anything, inflation is temporary. This is the long-wave decline that is approaching and it is going to be deflationary.
http://www.longwavepress.com/Baby_Boomers_Generation_X_SCv1a.pdf
“I were to make a complaint it would be that our educational system ( also liberal dominated) at the top end turns out way too many lawyers and MBAs and not enough scientists, doctors and engineers but that too maybe a systemic problem.”
You know, if you polled MBAs and lawyers, you’d find most of them would describe themselves as conservative, and most would be Republicans. On the flip side, you’d find a lot more Democrats among the technicians. Same goes for teachers.
The only problem I see is that the GOP supports greed and wealth, while the liberal, Democrat-dominated educational system blithely ignores this fact, and fails to promote the more difficult subjects and useful professions.
“Neither conceptually nor empirically does there appear to be any grounds for distinguishing between authoritarianism and the conservative personality – except that the former may be regarded as a somewhat more particular case of the latter.” (Wilson, G. The Psychology of Conservatism. New York: Academic Press)
“It appears that conservatism has pathological dimensions manifested in violence and distorted psycho-sexual development” (Boshier, 1983, p. 159). This is supported by a study conducted by Walker, Rowe, and Quincey (1993) in which there was a direct correlation between authoritarianism and sexual aggression. An investigation done by Muehlenhard (1988) revealed that rape justification and aggression toward subordinate individuals was much higher in conservative personalities than any other sociopolitical subgroup of a given population.” (Introductory Psychology l Crooks & Stein 1991 edition)
“Conservatism is not the doctrine of the intellectual elite or of the more intelligent segments of the population, but the reverse. By every measure available to us, conservative beliefs are found most frequently among the uninformed, the poorly educated, and the less intelligent” (McClosky, H. Conservatism and Personality. American Political Science Review, 52, 27-45.).n
It’s funny isn’t it. You talk about how one blue collar worker used to be able to afford a house. And what you get in return is a rant on why can’t the schools turn out more professionals? We need for housing to drop back to affordable levels. We need to get the speculators and flippers out of the market, driving prices up. And, most importantly, we need to be developing jobs that don’t require a Ph.D to be hired. We are not getting beat out by countries with more higher education degrees than us. We are outsourcing jobs to people without even a high school education. Ask anyone that’s had to use tech support in India. I’ve always thought that the plan was to drop the American standard of living, so that our wages would be low enough to compete with other nations. Looks like they’ve done a good job.
It’s quite simple.
It’s only been a matter of time until the vector of falling wages (disposable income) finally crossed the vector of rising prices.
You can’t support an economy that is 75% retail driven if your citizens (remember them?), er, consumers can’t afford to consume.
Teri,
You final lines cited the purpose for global trade. NAFTA et al are the tools used to change this nation from manufacturing to service. And no service economy has ever recovered from a great depression. Not one.
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