#217 Trade Agreements Cost Jobs! But Why? (Part 4 of 4)

11 Sunday Sep 2016

Posted by Jordan Abel in Back Asswards Thinking, Economics

First-time readers, this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about Revenge Revolution and author, Entry #1. List and general description of entries to date. Annual assessment whether Revolution plausible.

Note: most characters appear in a number of entries, with many entries building on previous conversations. Profile of characters. You’ll catch on quickly. Thanks for your time and interest…and comments.

Scene: Jordan’s Office, on phone with nephew of long-time friend. Nephew is taking advanced economics course and been assigned paper to determine if trade agreements cost US workers jobs. Conversation begins Entry #214.

Jordan: “Billy, you asked if automation might be costing jobs in the service industry. What do you think?”

Billy: “I’ve never really thought about it. All the hype in the 2016 presidential election was on manufacturing jobs. I don’t remember much talk at all about service jobs.”

Jordan: “That’s because many jobs in the service are not affected by trade agreements. As we talked about, if you want to stay in a hotel in Manhattan, a hotel in Cancun is of no value, no matter how inexpensive it is.”

Billy: “Where should we start?”

Jordan: “We’ll look at some general categories of service sector jobs. Let’s start with banking.”

Billy: “As best I can tell, automation and the internet have been responsible for a major loss in banking jobs. You know, the only time I’ve been in a bank is with my grandparents. Other than needing some cash now and then, which I can actually get at the grocery store, why do I need a bank? If people need a bank, put it in the grocery store.”

Jordan: “What about safe-deposit boxes for valuables – jewelry, old coins, pictures, important papers? That kind of stuff.”

Billy: “People store furniture and other items in self-storage units. Why couldn’t you have a self-storage unit of safe-deposit boxes? Most of those self-storage places are open 24×7…and banks sure aren’t. You could make the place as secure as a bank.”

Jordan: “What about the food service industry? We know most jobs are unaffected by trade agreements…but what about automation?”

Billy: “Lots of places…at least the ones I go to…have an iPad-like device on the table for ordering. In most places, people still bring your food but there aren’t many servers around.”

Jordan: “What about automation in the kitchen?”

Billy: “I see more automation all the time, especially at fast food places. And you know what? I think the quality is more consistent and overall, the food tastes better.”

Jordan: “What about delivery services – pizza, FedEx, UPS, even the Post Office? How much has automation affected employment?”

Billy: “From what I understand, a lot. Most of the automation is in areas we don’t see – back office stuff. Also, a lot of drivers are being eliminated by self-driving vehicles. Again, those are in areas we don’t see – one warehouse to another. The deliveries in the neighbor are still by humans…but who knows how long that will last.”

Jordan: “Two more categories and then we’ll call it a wrap.”

Billy: “OK, you’ve really got me thinking.”

Jordan: “What about skilled trades – carpenters, plumbers, electricians, brick layers?”

Billy: “Did you know another uncle has a construction company? Mostly new residential.”

Jordan: “No, tell me more.”

Billy: “When I was 7 or 8 years old, he used to take me to the job sites to watch homes being built. Lots of people hammering, sawing, installing stuff. People everywhere.”

Jordan: “You still go?”

Billy: “I did this past summer and wow, what a change.”

Jordan: “What’s so different?”

Billy: “Most all the heavy-duty construction is done in a factory. The job site is more like assembling Lego’s. He’s even got robot installing lots of bricks.”

Jordan: “Where are all the skilled trades?”

Billy: “Some skilled trades are in the factory to make sure everything installed correctly and a few at the job site for final hook-up. But a lot of skilled trades have been replaced by machines at the factory and workers with fewer skills.”

Jordan: “But none of the people replaced by robots or constructing in a factory were the result of trade agreements, right?”

Billy: “All affected by automation. What’s the final category?”

Jordan: “There are many more industry categories we could address – medicine, legal, auto technicians, for example – but I want you to think about the effect of trade agreements on software development.”

Billy: “Well, it’s really hard to put a wall around electrons. I suppose you could put some sort of tariff on software development.”

Jordan: “Any ideas how?”

Billy: “Not really. Companies could develop software and then put on servers in another country. People in the US could easily access software and their files though the cloud. I just don’t know.”

Jordan: “Billy, what’s your conclusion now? Do trade agreements affect employment in the US?”

Billy: “Some. The real culprit seems to be innovation. And innovation is going to occur with or without a trade agreement.”

Jordan: “What about trying to bring jobs like it used to be in America?”

Billy: “You mean like the Trump slogan from 2016, ‘Make America Great Again’?”

Jordan: “Possible or not?”

Billy: “One thing is for certain. If you try to recreate a by-gone era, it’s guaranteed the rest of the world will run past and the US will fall behind.”

Jordan: “Now you have the foundation for your paper. Countries should try to make sure the playing field is reasonably level for any trade agreement. However…”

Billy: “…thinking one can recreate the past and avoid being realistic about the impact of technology on jobs is fool hearty. Right?”

(End of segment on trade agreements. I know there’s more to cover but enough for now.)

#215 Trade Agreements Cost Jobs! But Why? (Part 2)

27 Saturday Aug 2016

Posted by Jordan Abel in Back Asswards Thinking, Economics, Gov't Policy

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Gelly: (answering in-bound call) “Mr. Abel’s office. May I help you?”

Caller: “My name is Billy Belleville. I believe Mr. Abel talked to my aunt. I also left a voice mail yesterday that I would call back.”

Gelly: “Yes, Mr. Belleville, we’ve been expecting your call. And, FYI, please call Mr. Abel, ‘Jordan.’ I know you’ve had good upbringing, but this is a business call. I’ll patch you through.”

Billy: “Thanks.”

Gelly: “Jordan, Billy Belleville is on line #2.”

Jordan: “Billy, thanks for calling again. My apologies for having to leave a voice mail yesterday. Gelly and I were both out of the office. How may I help you?”

Billy: “Did my aunt tell you about my assignment?”

Jordan: “I have some idea but why don’t you assume I know nothing and start over.”

Billy: “I’m taking an advanced economics class this semester. A major portion of the grade is a paper to determine if trade agreements help, hurt or have minimal impact on US employment.”

Jordan: “Any other instructions?”

Billy: “Not about the problem.”

Jordan: “Interesting topic. I like that your professor kept the instructions vague. Welcome to the real world.”

Billy: “I was hoping you could give me some guidance.”

Jordan: “Glad to try. My first question is, ‘What do you think the impact of trade agreements is on US employment – positive, negative or neutral?’”

Billy: “I really don’t know. There seems to be a significant difference of opinion in Washington.”

Jordan: “What have you heard?”

Billy: “I remember the 2016 presidential election. Donald Trump kept saying that trade agreements were bad for US workers. He also said if elected, he would tear up the agreements and renegotiate them in favor of the US.”

Jordan: “So based on Trump logic, you’d conclude that trade agreements are bad, right?”

Billy: “Yes, but that makes no sense. I mean, why would the US enter into all these agreements if the agreements are always bad?”

Jordan: “Welcome to Washington hyperbole. Just for fun let’s discount the Donald’s logic and assume for a minute that maybe not all trade agreements are bad. What do you think trade agreements are supposed to do?”

Billy: “Trade agreements should make it easier for two countries, or even a block or countries, to trade with one another.”

Jordan: “Good fundamental answer. I would add that ideally the countries involved in the trade agreement have different skill sets or capabilities.”

Billy: “So, if we take the US, since we’re a very efficient producer of many agricultural products – corn, soybeans and wheat, for example – the US should seek out countries that might need these products but have some products the US doesn’t produce or where the US cost is too high. Is that right?”

Jordan: “Yes. Now let’s take a trade agreement that is in place and see what each country could or should bring to the table. Let’s take NAFTA – the North American Free Trade Agreement that includes Canada, the United States and Mexico. Let’s start with Canada – what does it bring to the table?”

Billy: “Agriculture, especially wheat, fish products, manufacturing and lots of minerals and timber products.”

Jordan: “What about the US?”

Billy: “Agriculture – as I said corn, wheat, soybeans…and I think even rice. Huge manufacturing base, although a lot fewer people today that say 40-50 years ago. Lots of oil and gas. Many minerals – although not as much as Canada, and software, if that counts.”

Jordan: “Software counts. What about Mexico?”

Billy: “Maybe not fair, but I think Mexico as very limited manufacturing, except on the Rio Grande border, not much agriculture for export. I guess mostly tourist locations. Lots of lower-cost labor.”

Jordan: “What you described for Mexico is a huge untapped market for goods produced in the US and Canada.”

Billy: “But don’t the Mexican people need more income to buy the goods. Don’t they need higher-paying jobs? They just can’t go buy on credit if they don’t have money to pay it back.”

Jordan: “Where are those jobs going to come from?”

Billy: “According to what Trump kept saying, the jobs were coming from US workers. If not US workers – or Canadian workers — where do they come from?”

Jordan: “The better question is, ‘How can trade agreements create jobs in both countries and…notice I said both countries. Or for NAFTA, create jobs in all three countries’?”

Billy: “I understand your question. For jobs to be created in one country doesn’t that mean jobs are lost in the other country, or countries. Is that right?”

Jordan: “Trade between countries is not a zero-sum game. Trade agreements should create job opportunities.”

Billy: “Then why did Trump and some other politicians keep ranting that trade agreements are bad for the US?”

Jordan: “I want to add one more issue to think about…and then we’re going to take a short break. Why are politicians who oppose trade agreements with other countries not opposed to one state in the US recruiting companies from another state? Such recruiting, especially by southern states, includes huge taxpayer-funded incentives. Why should North Carolina use taxpayer money to recruit companies located in say Buffalo, Cleveland, Detroit, New York City? Allowing states to use taxpayer funds to recruit companies in other states is worse that zero-sum, it’s negative. Think about that issue over the break.”

(Continued)

#214 Trade Agreements Cost Jobs! But Why? (Part 1)

21 Sunday Aug 2016

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, Economics, Gov't Policy, Societal Issues

≈ 3 Comments

Scene: Jordan’s Washington, DC Office

Gelly: “Jordan, Ms is on the phone and would like to talk to you.”

Jordan: “Really? What’s she want to talk what?”

Gelly: “Some question about trade agreements and the impact on American jobs.”

Jordan: “OK, thanks.” (Jordan picks up phone.) “Mr. Abel here. How may I help you?”

Ms: “Cut the formality, Jordan. How are you? Been a while since we chatted.”

Jordan: “Agreed it has been too long. I’m doing OK. More importantly, how you doing? You survive the floods in Louisiana?”

Ms: “Floods were south of here. I’ve got a lot of friends in that area. Most of them have lived down there for a long time and never experienced a flood. But not this time. Really bad damage. Awful.”

Jordan: “Sorry to hear about your friends. But are you OK?”

Ms: “Just had another check-up and everything looks fine…thankfully.”

Jordan: “Great. Now, really why the call?”

Ms: “My nephew is in college and taking some advanced economics course. On the first day the professor assigned everyone a paper to analyze and decide whether US trade agreements are good, bad or neutral for US employment.”

Jordan: “And he thought you might have a contact that could help him?”

Ms: “He knew for sure that I couldn’t help him. What does a motorcycle riding aunt know about trade agreements and employment?”

Jordan: “You never know.”

Ms: “So what do I tell him? Can you help?”

Jordan: “I’ll try. What’s his name?”

Ms: “Beaufort Belleville.”

Jordan: “You kidding me? Beaufort Belleville. What kind of name is that?”

Ms: “You know some old-line southern families use surnames of close relatives for first names of children. Anyway, he goes by Billy, so please don’t call him Beaufort.”

Jordan: “Glad to talk to Billy. Have him call me Wednesday or Thursday this week, if possible. I’ll give Gelly a heads up about the call.”

Ms: “Thanks Jordan. He’ll appreciate it…and I will to.”

Jordan: “Let’s have dinner next time you’re at the farm up here or when I’m down your way, OK?”

Ms: “OK, but remember it’s your turn to buy.”

Jordan: “Alright, I’ll buy. Take care.”

#207 Why Vote for the Donald (Part 4)

06 Wednesday Jul 2016

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, Societal Issues

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Scene: Jordan’s Washington office. Conversation begins Entry #204.

Greenie: “Back from the break. Let’s see if we can wrap up reviewing your friend’s list of ‘Reasons to vote for Trump.’”

Jordan: “We can try but there are seven (7) more to go.”

Greenie: “Alright. I’ll be patient. What’s the next reason?”

Jordan: “#7 on the list, ‘Culture: Constitution and Bill of Rights.”

Greenie: “Culture, culture. What do you suppose they meant? Culture can be a ‘way of thinking or behaving.’ Wonder if that’s what they meant?”

Jordan: “I’d say ‘yes.’ When Trumpsters said Constitution and Bill of Rights they usually meant ‘let’s go back to the 18^th Century.’”

Greenie: “So even though the Bill of Rights were not part of the original Constitution…and were added as Amendments #1-#10, the Trumpsters really meant that Amendments #11-#27 were added later and therefore should not count. Right?”

Jordan: “Probably, except the 2^nd Amendment, which should be considered in today’s terms.”

Greenie: “They want to revert to the 18^th Century except for the 2^nd Amendment. But for the 2^nd Amendment the definition of the right to bear arms should (i) ignore the original meaning of a well-regulated militia, which we now have with a standing military and police forces and (ii) include allowing almost anyone to easily buy and own a near replica of all weapons used by today’s infantry, whether Army or Marines. I’ll give credit to the Trumpsters for one thing. At least they were consistent.”

Jordan: “How so?”

Greenie: “Trumpsters would consistently pick an interpretation of a law that fit their need. The logic of the interpretation could vary from one law to the next and sometimes even for the same law, depending on circumstances. But they were consistently inconsistent.”

Jordan: “You mean like the first 10 Amendments should count as part of the Constitution but #11-#27 shouldn’t count?”

Greenie: “Especially exclude the 14^th Amendment since ‘those people’ have never deserved to be citizens. The 22^nd Amendment applied only if there was a Democratic president.”

Jordan: “Greenie, are you being overly cynical?”

Greenie: “I can understand some of the individual statements about why to vote for Trump. But you start to combine 3 or 4 of them, the approach is so out of whack it would not pass the first test in Logic 101.”

Jordan: “That’s because you think through issues and understand how the different issues are linked. When your decisions are based solely on emotion, logic does not matter. Think about the Rushman and talk radio. Logic just gets in the way.”

Greenie: “OK, what’s #8?”

Jordan: “And, #8 is, ‘Drug free: Mandatory drug screening before and during welfare.’ I guess that means…”

Greenie: “Guess? No reason to guess. Blacks, of course, are the cause of most of the drug problem in this country. Blacks also dominate the welfare rolls. Blacks won’t give up drugs. Therefore reduce the welfare rolls through drug tests. Plain and simple solution.”

Jordan: “But whites make up the majority of people on welfare. And whites make up a majority of people using illicit drugs.”

Greenie: “Doesn’t matter what the facts are. Blacks don’t deserve the same treatments as whites. Get blacks off the welfare rolls and a major spending issue solved. Get with it Jordan.”

Jordan: “You’re starting to sound like a Trumpster. What’s happened to you?”

Greenie: “I’ve seen the light. Seriously, you know I don’t support what I just said. But I agreed to write a series of articles about the causes of the Revenge Revolution. At least I need to understand all perspectives, especially the extreme right…and the extreme left.”

Jordan: “Now I’m the one getting confused…and frustrated. You really think the logic behind a drug testing program for welfare was to exclude blacks?”

Greenie: “Absolutely. When this list was written in 2016, blacks on welfare tended to be concentrated more in urban environments and those states leaned more toward Democrats. Whites on welfare were concentrated more in rural areas and many of those states leaned toward Republicans.”

Jordan: “You’re suggesting states with higher concentration of whites could circumvent any Federal law re welfare?”

Greenie: “Of course. Look at how Republican governors tried to circumvent the Affordable Care Act, even to the detriment of many tax-paying citizens in the state. Look at how Republican legislators tried to circumvent the SCOTUS ruling on abortion rights. And your wonderful state of North Carolina…”

Jordan: “Please, that’s where I live. I’m considered an illegal alien by many natives.”

Greenie: “Look how NC led the attack on legalizing discrimination against the LGBT community. The legislators and governor did not care how much money it cost the citizens or the state in lost revenue. The NC legislators had to uphold 18^th Century principles. Legislators in red states are so predictable.”

Jordan: “Make that red-state legislators were predictable. We’re seeing some change since the Revenge Revolution.”

Greenie: “What’s #9? I thought we could zip through the rest of these but I guess not.”

Jordan: “#9 is ‘Freebies: None to non-citizens.’”

Greenie: “I guess that means no welfare, no education for children, no ER treatment at hospitals…even if you have a green card, paying taxes and following all the rules to become a citizen.”

Jordan: “You think the Trumpsters meant to exclude people with green cards?”

Greenie: “I just interpret what I read. The term ‘freebie’ is not defined, of course. I just hope the Trumpsters never get ill and have to visit a doctor or hospital while travelling outside the US.”

Jordan: “Reciprocity would be a good lesson for the Trumpsters. ‘Sorry you’re ill but you need to return to the US for treatment of your appendicitis. Our government does not allow treatment of people who are not citizens of this country. Good luck on making it back.”

Greenie: “Now you’re being cynical. But I do like the idea of the Trumpsters getting the one-fingered salute. Should we try to tackle the rest of the list?

Jordan: “No. This looks like a good stopping point.”

(Continued)

#200 US Microcosm: Raleigh Republicans Render Revenge (Part 1)

22 Sunday May 2016

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, Gov't Policy, Societal Issues, Stupid Is as Stupid Does

≈ 3 Comments

First-time readers, this blog is set in the future (sometime after the year 2020). Most entries assume there has been a 5th revolution in the US — the Revenge Revolution. More about Revenge Revolution and author, Entry #1. List and general description of entries to date. Annual assessment whether Revolution plausible.

Note: most entries are constructed as a dialogue between the main character, Jordan Abel, and variety of colleagues, friends and random acquaintances. Characters appear in a number of entries, with many entries building on previous conversations. Profile of characters. You’ll catch on quickly. Thanks for your time and interest…and comments.

This entry breaks with the traditional format. Regular readers might be wondering why all the entries about NC legislators. I’d like to let go and move on to another topic. However, just when I think the legislators are beginning to act rationally, they manage to continue to do something potentially harmful to the state.

The actions in Raleigh seem to be a microcosm of what’s happening in Washington. Two sides seemingly unwilling to compromise, even if one of the positions is considered so extreme that no compromise is possible. Further, the irrational actions often continue even when continuing could cause consider harm to a wide swatch of society.

For NC legislators, the most recent action is a threat to withhold a limitation on the amount of sales tax on jet fuel paid by American Airlines. While I believe that incentives are not the most effective way to attract and grow businesses, incentives do seem appropriate in some cases…and this is one.

Charlotte is a major airline hub (Initially USAir which was acquired by American). The airport itself is not a major economic driver, but having a major airline hub is a major economic driver. Numerous companies, especially companies with HQ outside the US, have cited an important reason for locating in and around Charlotte is easy access to international flights.

So why does the legislature want to eliminate the incentives? Not because of opposition to incentives. But because American Airlines supported repealing HB2 (the bill that among other things forces transgenders to use the bathroom of the sex listed on their birth certificate). And American is not alone is supporting repeal of HB2. Many large employers in North Carolina have urged the governor and legislators to repeal of the law.

So, how do the governor and legislators respond? Like 2-year olds. The legislator and the governor appear willing to bring economic harm to many citizens in NC because someone told them their legislation was stupid. And, like a whiny 2-year old, the legislators and the governor blamed someone else – in this case the mayor of Charlotte.

What did the Charlotte mayor do? Lead the effort to pass the ordinance allowing transgenders to select their restroom. The ordinance, which applies only in the City of Charlotte, is admittedly controversial. However, before the ordinance took effect and before the residents of Charlotte had an opportunity to overturn the ordinance – city-wide referendum, recalling the mayor and council, etc. – the state legislators stepped in to “save Charlotte from itself.”

So here we have legislators from throughout the state, many of whom probably have never been in Charlotte, telling the residents of Charlotte what’s good for them. And oh, yes, Charlotte residents, we’re going to take away your right to address issues that affect only your city. Why? Because, we, the Republicans in Raleigh, know best. A little bit of overreach here?

Then what happens? With the overreach the NC legislators poked the big dog in Washington…and, oops, the dog bit back. Department of Justice filed a suit against the state. Then the Department of Education issued a directive mandating that schools comply with regulations that are similar to the Charlotte ordinance.

The NC 2-year olds claimed overreach by the Federal government and harden their stance. The result was to inflict more economic damage on the state as companies began to drop NC from consideration for relocating or expanding operations. The economic damage affected Charlotte, even though the City has made considerable effort to attract a more diverse workforce and attract more high-tech industries.

The legislators apparently offered to repeal HB2 if Charlotte repealed its ordinance. The Charlotte mayor and some council members…and many citizens…responded by asking “‘why agree to something the other side had no business getting involved in the first place?” The current resolution of the issue is weaving its way through the courts, which could take years.

A better step, I think, is let the people of Charlotte decide if they want to support the ordinance. Let residents debate the plusses and minuses, possibly reach a reasonably palatable solution to all sides.

Voters in the City of Houston rejected a similar ordinance. Other cities have ordinances similar to the one passed by Charlotte. But let the residents of the area affected decide. If Charlotte wants to be labeled as “too liberal” by some others in NC, so be it. Those same people will likely not go to New York, San Francisco or many other locations.

The irony, from my perspective, is transgenders have been using the bathroom of choice for many years with no apparent incidents. Now that the City of Charlotte formalizes the choice, Republicans in Raleigh believe there is an issue. Uh, your reaction couldn’t be merely political could it?

And thus, the suggestion that NC is a microcosm of the US. Every decision in Raleigh and Washington seems to have become so politicized that compromise and reasonable solutions are impossible. Further the seeming insistence on seeking revenge and inflicting pain on those who have a different view reinforces my concern the US is headed for a 5^th revolution, the Revenge Revolution.

The next few entries will center on NC HB2 bill. Then we’ll move on. Jordan Abel

#196 How Tax Policy Created Multiple Flints (Part #6 of Series)

30 Saturday Apr 2016

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, Gov't Policy, Societal Issues

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Scene: Jordan’s office in Washington. Jordan meeting with JC, who has agreed to get storylines about causes of the Revenge Revolution for Greenie, a mutual friend. Greenie is recovering from short-term illness. Conversation started #191.

Jordan: “For Greenie’s next article about the Revenge Revolution let’s select a topic that’s less political.”

JC: “Look, most big societal issues seem to come down to politics one way or another.”

Jordan: “Probably so. But some factors causing the Revolution didn’t start as big political issues.”

JC: “You have a particular topic in mind?”

Jordan: “Flint, Michigan.”

JC: “That’s an old story. Won’t Greenie be beating a dead horse? Besides you talked to POTUS about Flint. What’s new?”

Jordan: “Not much new about the facts. What is new is that we…societal we…failed realize the underlying cause of the problem. We failed to realize the cause when it happened. We fail to realize the cause now.”

JC: “And, I take it, you think the failure has widespread implications?”

Jordan: “Right. There are still many cities with problems very similar to Flint’s.”

JC: “When the story broke, there was lots of finger-pointing by politicians. Then people got very angry and Flint finally got a solution.”

Jordan: “What troubles me is the solution addressed the symptoms, not the cause.”

JC: “You saying fixing the infrastructure in Flint…and elsewhere…was the easy part? The Band-Aid?”

Jordan: “Here we are 5+ years after the Flint problem became public and we still haven’t start addressing the underlying cause. When are we going to wake up?”

JC: “Maybe that’s what Greenie should explore and write about – the real causes of problems in Flint.”

Jordan: “We keep saying Flint but we know the problem is more widespread – look at Detroit, Chicago, Cleveland…and a lot of other cities.”

JC: “I know there’s more than Flint but it’s a great example that’s still fresh in everyone’s mind. What did you tell POTUS?”

Jordan: “If you take personalities out of the Flint equation…”

JC: “…you mean like that guy you talked about that had it in for Flint — GM’s chairman. Squeaky or whatever his name was.”

Jordan: “Roger B. Smith.”

JC: “That’s it, Roger Smith. I like the name Squeaky better.”

Jordan: “If you take personalities out of the equation, the primary cause seems to center on US tax policy.”

JC: “Huh? Flint and tax policy. How so?”

Jordan: “Because tax policy allowed, maybe encouraged is a better term, inflated compensation for senior executives. The compensation was tax-deductible but hidden in the form of stock…more stock options then.”

JC: “Aren’t stock options only worth something if the price of the stock goes up?”

Jordan: “True but shareholders really didn’t understand how much the executives could make if the stock price increased.”

JC: “So what’s wrong with the executives making money? If the stock price increases, all the shareholders benefit also.”

Jordan: “How do you think the execs increased the stock price?”

JC: “I guess more effective management. Maybe introducing new products. I don’t know.”

Jordan: “What about cutting costs?”

JC: “Sure you can cut costs some but that only works for a while. No one ever saved their way into prosperity.”

Jordan: “Part of the problem at public companies was Wall Street.”

JC: “You keep confusing me. I thought Wall Street guys made it possible for companies to grow…and create all that wealth.”

Jordan: “One thing people need to understand. Wall Street pushes a stock price higher for increased earnings, not necessarily for preparing to grow the business. The focus during Squeaky’s reign was short term…and to a large extent the focus today remains short-term.”

JC: “Keep talking. I’m still a little confused.”

Jordan: “For many established companies, generating cash flow was…and is…rewarded more than building for long-term growth.”

JC: “Why? That seems like back asswards logic.”

Jordan: “I think it is back asswards logic. But for many stock traders, short-term is more important. Long-term growth is uncertain and requires cash. Earning often suffer before growth begins.”

JC: “Sounds to me as if Wall Street cared only about performance today, not really about the future. And certainly Wall Street didn’t care about the company. I keep using past tense. But you’re saying it’s till true today.”

Jordan: “Exactly right. People who trade stocks have no emotional bond with the company. Wall Street’s focus is dollars, not the company or its people.”

JC: “So now the company execs, who have a boatload of the stock options, need to play the Wall Street game if they want to make money. Otherwise the options could be worthless.”

Jordan: “Now you have it. The execs are the dog being wagged by the Wall Street tail.”

JC: “Based on what you just described, it makes more sense to cut costs and not spend money for future growth. Seems so stupid.”

Jordan: “Pretend you’re a CEO of a big manufacturing company with lots of workers in Flint, Detroit and elsewhere. And then…”

JC: “…I look at my pile of stock options and ask myself, ‘How can I make the most money?’ Mmm, maybe I can move operations to Mexico, or China as a way of cutting costs. And with that thought I shed a crocodile tear for the workers and the cities left behind. Their problem, not mine.”

Jordan: “Enlightening, huh?”

JC: “I never connected tax policy with movement of US companies to Mexico and China…or even to the southern US.”

Jordan: “Think about the implications of the tax policy.”

JC: “For the execs, they gain in wealth. They also walk from any obligation to the workers or the communities.”

Jordan: “Heads I win. Tails you lose.”

JC: “Seems more like the execs gave a one-fingered salute to everyone on the way to the bank.”

Jordan: “So if Greenie writes about how tax policy helped cause the downfall of Flint and other places, maybe…just maybe…the post-Revenge Revolution Congress will make some changes.”

JC: “And may…just maybe…people will begin boycotting companies who don’t support US cities and workers. And with that, I need a break.”

#193 North Carolina: First in Discrimination; Last in Education (Part #3 of Series)

09 Saturday Apr 2016

Posted by Jordan Abel in Back Asswards Thinking, Education Issues, Societal Issues

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Scene: Jordan’s office in Washington. JC and Jordan continue conversation from #191.

JC: “You know it’s probably not fair to say North Carolina is last in education just because they refuse to pay teachers a decent wage.”

Jordan: “Whadda mean that’s not enough justification?”

JC: “Doesn’t NC have a decent university system. I mean University of North Carolina has good basketball teams.”

Jordan: “Have you ever wondered why the teams are so good?”

JC: “Good coaches and good academics, I guess.”

Jordan: “You can skip the good academics part. You might not remember but in say 2014-2016 there were numerous stories about how UNC allowed athletes to take non-existent classes…I should say classes that required no attendance. And then…surprise, surprise…the athletes all got very good grades in these vapor classes.”

JC: “But that was just for a year or two, right?”

Jordan: “Try much longer.”

JC: “Really? I didn’t hear any of that.”

Jordan: “The school tried to keep everything quiet…”

JC: “You mean cover it with tar…like the Tar Heels?”

Jordan: “Very good. How’d you know the name Tar Heels? Never mind. Anyway, the practice of allowing athletes to take no-show classes and have someone else write papers when necessary apparently goes back to the 1990’s, maybe longer.”

JC: “The coaches have must have known about the scam.”

Jordan: “The coaches claim they didn’t know.”

JC: “That’s the biggest crock I’ve ever heard. Let’s see, the coach recruits some kid who’s great at basketball but with no apparent academic skills.”

Jordan: “And when he starts to play college-level basketball he learns how to study…”

JC: “…and voila, he becomes proficient in algebra, English and whatever else he’s supposed to study. So under the leadership of this basketball coach, the kid’s IQ jumps 50-60 points and he turns into Albert Einstein.”

Jordan: “In all fairness, some of these kids are really street.”

JC: “I agree. But universities are not about how to become street smart. Universities are about becoming book smart and learning critical thinking. In all this fiasco, where were the coach’s ethics…and the university’s ethics?”

Jordan: “I hear from UNC grads that the program of no-show classes and inflated grades wasn’t so bad since many other schools have similar programs for athletes.”

JC: “First, I think that’s BS. Besides just because someone else does something unethical doesn’t mean its ok for you to do something unethical. I thought UNC was the pillar of ethical behavior. Isn’t the area around UNC the buckle in the Bible Belt?”

Jordan: “Yep.”

JC: “So for the UNC Bible belters, cheating is OK as long as you can get away with it. Then when you get caught, don’t take responsibility but try to blame someone else.”

Jordan: “That seems to be the formula.”

JC: “Maybe we should change the NC state slogan to: “First in Discrimination; Last in Education; Last in Ethics.”

#192 NC: First in Discrimination; Last in Education (Part #2 of Series)

06 Wednesday Apr 2016

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, Gov't Policy, Societal Issues, Stupid Is as Stupid Does

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Scene: Jordan’s office in Washington. JC and Jordan continue conversation from #191.

JC: “What have I been up to while you were away on R&R?”

Jordan: “Hardly consider recovering from surgery R&R.”

JC: “Well, you weren’t working very much as far as I know, so it must have been R&R.”

Jordan: “Back to my question, what have you been doing lately?”

JC: “Helping Greenie prepare some articles on the Revenge Revolution.”

Jordan: “Now I have to deal with both of you?”

JC: “You love it and you know it.”

Jordan: “I admit, working with you guys is fun. What’s your topic?”

JC: “State governments running wild.”

Jordan: “Reminds me of a movie from many years ago, ‘Girls Gone Wild.'”

JC: “Did you actually watch that stuff?”

Jordan: “Look, I saw my share of trash. Remember I was a teenager once. And teenage boys sometimes do stupid things. But let’s get back to your topic. Any state in particular stand out for running wild?”

JC: “Yes, your current home state, North Carolina.”

Jordan: “Call it the state where I pay taxes. But I hardly consider NC my home state.”

JC: “Whatever you want to call it, the NC legislature might as well have approved a new slogan, ‘NC: First in Discrimination; Last in Education.'”

Jordan: “Funny, JC, but unfortunately close to the truth.”

JC: “Tell me what went on to cause such a shift in your state?”

Jordan: “Please don’t call it my state. We just happen to live there. I have no other connection with NC…nor do I want any.”

JC: “OK, but what went on? The legislature seemed to want to lead the race to the bottom. Didn’t they understand there would be economic consequences? As I recall PayPal cancelled a big project.”

Jordan: “Yes, PayPal did cancel a big project. But I’m not sure the legislators thought about the real consequences. Conventions also began avoiding NC, companies other than PayPal didn’t expand in NC…and some actually relocated elsewhere. As a result the economy stalled. Then the Republicans blamed everyone from the mayor of Charlotte to the Yankee liberals for ruining the state.”

JC: “Still fighting the Civil War and the carpetbaggers?”

Jordan: “I don’t know when they’ll give up and realize they lost, or even put on their big-boy pants. Anyway, the Republicans legislators in the state house continued to act incredibly stupid.”

JC: “Like teenage boys? But, why?”

Jordan: “My view is the legislators got addicted to power. About 2012 or so the Republicans gained control of the state house for the first time in a long, long time. The first couple of years they went a little crazy with legislation. Many voters just rolled their eyes and thought the craziness would pass and some semblance of sanity would return.”

JC: “But it didn’t, right?”

Jordan: “The craziness got worse. The Republican leadership was drunk with power.”

JC: “What about the governor? What was his name? Mac something. Wasn’t McConnell, was it?”

Jordan: “His name was McCrory, Pat McCrory.”

JC: “Wasn’t McCrory mayor of Charlotte for a long time before becoming governor? I thought Charlotte was a reasonably progressive city. They were on a roll for a while.”

Jordan: “McCrory was fairly progressive as mayor. In fact, the right wingers thought he was too progressive. One of those liberals, as they say.”

JC: “What happened when he became governor? How could he shift so far right so quickly?”

Jordan: “Good question. My opinion – I think he got overwhelmed by the complexity of the job.”

JC: “Are you saying he wasn’t the brightest crayon in the box?”

Jordan: “I don’t know how smart he really was…or is. But he seemed to leave some of those smarts in Charlotte when he became governor.”

JC: “So at that point NC has an emboldened Republican legislature and, in polite terms, a weak-kneed governor.”

Jordan: “Exactly. There was no moderating force so the right-wing kept pushing and pushing and pushing…”

JC: “…and it eventually pushed the state over the edge. In researching for Greenie, I read that to pay for tax cuts for the wealthy, the NC legislature cut salary increases for teachers.”

Jordan: “Even worse…or at least just as bad…to pay for tax cuts for the wealthy, the legislature increased taxes on middle and lower-income residents.”

JC: “What about the airport fiasco? The state really tried to take over Charlotte’s airport? How could they do that?”

Jordan: “Another power grab, although fortunately they did not succeed.”

JC: “Seems like the state legislature basically gave the finger to everyone. They told Washington that states like NC should have more power. Then told the NC cities they had less power. Think the legislators understood the irony of what they were doing?”

Jordan: “When you’re drunk, whether drunk with alcohol or drunk with power, there are a lot of things you don’t understand. The LGBT ordinance was yet another example.”

JC: “If I understand correctly, the city of Charlotte passed an ordinance banning discrimination against LGBT’s. The ordinance affected only the city of Charlotte. No other location was affected. Then the state pulled a power play and banned the ordinance.”

Jordan: “Banned the ordinance plus a bunch of other stuff…like prohibiting the city of Charlotte from raising the minimum wage beyond the Federal level.”

JC: “Didn’t the legislature call a special session and in less than 12 hours pass the legislation, and then governor sign the bill? But the bill prohibited something that had not yet taken effect. How can that be?”

Jordan: “The whole thing was probably outside the constitution. However, the weak-kneed governor claimed nothing really changed because the ordinance had not yet taken effect.”

JC: “Which means that if discrimination was OK before the ordinance, then discrimination could continue. Now I see why the Revenge Revolution started in North Carolina. People became sick of the crazies in the state house.”

Jordan: “Just to be fair, North Carolina wasn’t the only state with crazies in the state house. But it was leading the pack.”

JC: “Thus the slogan, ‘North Carolina: First in Discrimination; Last in Education.'”

#176 Normal People Give Dunce Caps to Science Deniers

30 Wednesday Dec 2015

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, Societal Issues

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Jordan: “Matt, before the break you said there was hope for countering the science deniers. What did you mean?”

Matt: “If I didn’t say so, I should have said, ‘I think there is hope.’ By ‘think’ I mean the Revenge Revolution seems to have marginalized a lot of the more radical fringe groups. Real adults are starting to be in charge. The adults are giving dunce caps to the whiny brats and forcing them to sit in the corner.”

Jordan: “I agree putting the whiny brats in the corner has been a major step forward. But what about your book? Is it still relevant?”

Matt: “Yes, think so. The emphasis might change a bit – from the impact of the science deniers to how normal people denied the deniers.”

Jordan: “I love the term ‘normal people.'”

Matt: “Well, I think that’s true. Normal people…or at least who and I consider normal people…are fairly logical.”

Jordan: “We might think we’re logical but aren’t you considered part of the so-called ‘liberal media’? How many years did you write for that bastion of liberalism?”

Matt: “You mean the dreaded New York Times?”

Jordan: “What I find most humorous is the most vociferous of those claiming bias of the ‘liberal media’ are the same one who frequently cite Fox News, the multitude of talk-radio shows and numerous websites as credible sources of information…but, of course, those sources are not part of the media. Can these guys connect even two dots?”

Matt: “For many conservatives a liberal media outlet is…or at least used to be…a source of information that does not toe the party line. By not toeing the party line, the outlet must be liberal…and therefore biased. Forget whether their outlet of choice reports only a fraction of the story…or even makes up the story. If the conservative disagrees with the reporting, the outlet must be liberal media.”

Jordan: “As you mentioned, on the plus side the Revenge Revolution seems to have quieted some of the alleged reporters on Fox News and talk radio.”

Matt: “We both know that Fox News and talk radio are entertainment outlets. Entertainment is tied to advertising. No one ever accused Rupert Murdock of being stupid about generating income. Borderline unethical in reporting? Probably. Stupid? No.”

Jordan: “My beef is that Fox and the talking heads claim to be credible news outlets, not just entertainment. When I was director of marketing for you know who, the only media programs I labeled as off-limits for advertising were TV and talk-radio shows that I considered grossly biased.”

Matt: “What about advertising on shows considered controversial?”

Jordan: “Controversial shows were OK as long as the information was reasonably accurate or not overtly racist or derogatory.”

Matt: “So I take that shows like Rush Limbaugh, Hannity and the like were off-limits?”

Jordan: “During my watch they were off-limits. In a competitive market, brand reputation does not need to be sullied based on some jerk on TV or radio. Enough things can go wrong with the product without some egomaniac flapping his or her lips.”

Matt: “But some of those shows are incredibly popular. You still think it was a good business decision to ban advertising on those shows?”

Jordan: “Matt, which companies…and organizations…last the longest? Those that operate with ethical standards or those that exploit the customer?”

Matt: “I hear you. But I still wonder whether investors and some customers really care?”

Jordan: “Look at what happened to VW after the diesel-emissions scandal. Sales dropped like a rock. It’s not clear whether VW can survive in this country and many countries worldwide.”

Matt: “Where does this conversation leave us…or lead us?”

Jordan: “We both agree…at least I think we do…that the Revenge Revolution in the US caused many people to put on their big-boy pants and start acting like adults.”

Matt: “And the adults banished the whiny children – the science deniers and fact deniers – to go to the corner and keep quiet…and keep on their dunce caps. What else?”

Jordan: “Groups and politicians on both sides of the aisle started working together to solve real problems.”

Matt: “So my book can have a happy ending, or at least an optimistic ending. The US might start solving big societal problems after all.”

Jordan: “Sounds as if you’ve got an interesting story to tell, Matt. Let me know if I can help.”

Matt: “You’ve been a great help already. I’ll keep you posted. Thanks for your time.”

Jordan: “You’re welcome Matt.”

#175 Dealing with the Science Deniers

27 Sunday Dec 2015

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, Education Issues, Societal Issues

≈ Leave a comment

JC: “Jordan, looks as if you have another visitor. Check behind you.”

Jordan: “Matt, great to see you.”

Matt: “Jordan, nice to see you. When you’re finished, may I talk to you for a few minutes, please? Or, if better for you, I’ll catch up with you tomorrow.”

Jordan: “Let’s spend a few minutes now. Let me introduce two long-time friends of mine, Greenie and JC. Guys meet Matt…”

Greenie: “Excuse me, but aren’t you the reporter who wrote the book on General Motors?”

Matt: “Yes, how’d you like it?”

Greenie: “Fascinating. I’m not much into business but the way you wove in personal stories kept my attention. I really did like the book.”

Matt: “Thanks. JC, what about you? Read the book?”

JC: “Parts of it. But I also conned Jordan into telling me some of the details. GM was a remarkable success and a remarkable tragedy.”

Matt: “At least the company is on the rebound now.”

JC: “Speaking of rebounds, Greenie and I need to get out of here. Matt, nice to meet you. Jordan, enjoyed the conversation.”

Greenie: “Me, too, Jordan. Take care of yourself and we’ll talk soon.”

Jordan: “OK guys. Thanks for being nice to the old guy. See ya’.”

Matt: “So how long have you known Greenie and JC?”

Jordan: “We all went to the same grammar school, although we were a grade or two apart.”

Matt: “Wow, I’m impressed that you still keep in contact.”

Jordan: “Greenie and especially JC are much better at keeping in touch classmates than I am. Before we get started, do you want a glass of wine or cup of coffee?”

Matt: “Coffee would be great. I’ll use Greenie’s cup. Looks as if she didn’t touch it. Is the pot regular or no-lead?”

Jordan: “Half regular, half no-lead…decaf.”

Matt: “That’ll work. Now I need to pick your brain.”

Jordan: “About what?”

Matt: “Science deniers. I’m drafting an article, and maybe a book about why some seemingly intelligent people deny scientific evidence. They might as well believe in vodoo. The denial is even more baffling for those with some college, let alone a degree.”

Jordan: “You mean like people claiming global warming is a hoax. And then claiming that 3,000 scientists…or some large number of scientist worldwide got together to perpetuate the hoax? I know one guy with an advanced degree in one of the sciences that believes there is a hoax.”

Matt: “I’ve heard other people with advanced degrees flatly deny mounds of empirical evidence for say certain economic theories. Why is that?”

Jordan: “Two reasons, and you just mentioned one – the use of the word ‘theory.'”

Matt: “You mean that in science, the use of the word ‘theory’ means a way of explaining behavior, given a certain amount of evidence. The theory can be used to predict other events, or outcomes.”

Jordan: “But for politicians, pundits and many in the public, theory means you have an idea but it does not need to be based on evidence or observations. To these people, a theory can be a wild-ass guess – a WAG, if you will. They like to give the finger to science. For this group, a scientific theory is like some Mickey-Mouse idea that can be discarded and even belittled.”

Matt: “What’s the second point?”

Jordan: “The only real sciences are chemistry and physics. The deniers claim chemistry and physics are real because some of them completed an experiment in a high school lab.”

Matt: “But the other sciences – climate science, economics, social sciences, etc.…you can’t do some lab experiment. The results aren’t the same every time like chemistry and physics lab experiments so someone is just guessing at the outcome. Those ‘other’ sciences are squishy — like a tennis ball — and therefore not real science. Think how often the weather man is wrong. So what climatologists know about global warming?”

Jordan: “The irony is that the so-called ‘hard sciences’ – chemistry and physics – are just as squishy. But to the ideologues why ruin a good argument? Claim the other sciences are really not sciences and therefore discount or discard all results that don’t fit the ideologue’s position. So Matt, how do you (i) capture in a book the phenomenon of denial among seemingly intelligent people and more importantly, (ii) make the book interesting?

Matt: “That’s why I need some help. I really want to point out why public policy should be based as much as possible on science, even if the scientific theories are being challenged and tweaked over time.”

Jordan: “To me the most important issue for any public policy is relevance. By that I mean, understanding the consequences of action or inaction. If something is out of balance, fix it.

Matt: “Tell me more about what you mean.”

Jordan: “The issue with global warming, for example, is not determining exactly how much extra CO2 is generated by say coal-fired power plants. We know coal-fired plants are a out-of-balance contributor to global warming. So the policy should be replace coal asap with less polluting approaches to generating electricity.”

Matt: “What about focusing on measuring the amount of global warming from coal plants, rather than the claiming plants as a major contributor?”

Jordan: “How many angels can dance on the head of a pin? The exact amount becomes an academic argument that does not solve the problem. Science-deniers will claim global warming, for example, is due from multiple causes and therefore nothing can be done.”

Matt: “Are you saying just focus instead on what solutions can help solve the problem?”

Jordan: “Matt, to me focusing only on solutions takes us full circle and does not really help solve problems.”

Matt: “Why so?”

Jordan: “Because without a real understanding of the cause of the problem — even if the amount contributing to the problem is not exact — then the deniers will offer solutions that fit their fantasy world and not address the issue.”

Matt: “Have an example other than global warming?”

Jordan: “How ’bout economic policy? The deniers continue to refuse to accept mounds of empirical evidence demonstrating that in a recession the central government needs to increase expenditures, not decrease expenditures. The deniers’ solution is exactly the opposite of the evidence.”

Matt: “I need a break. But I also want to say I think there is hope.”

Jordan: “Good. I can’t wait to hear your logic.”

usrevolution5

~ USA Headed for a 5th Revolution! Why?

Category Archives: Back Asswards Thinking

#217 Trade Agreements Cost Jobs! But Why? (Part 4 of 4)

#215 Trade Agreements Cost Jobs! But Why? (Part 2)

#214 Trade Agreements Cost Jobs! But Why? (Part 1)

#207 Why Vote for the Donald (Part 4)

#200 US Microcosm: Raleigh Republicans Render Revenge (Part 1)

#196 How Tax Policy Created Multiple Flints (Part #6 of Series)

#193 North Carolina: First in Discrimination; Last in Education (Part #3 of Series)

#192 NC: First in Discrimination; Last in Education (Part #2 of Series)

#176 Normal People Give Dunce Caps to Science Deniers

#175 Dealing with the Science Deniers