How to Read a Book

HOW TO READ A BOOK OR AN ARTICLE

“George Soros on Globalization”
Published by “PublicAffairs”, a member of the Perseus Books Group
Published in 2002

Reading a book or an article should be a conversation with the author – or more like a debate, with a search for common understanding. The author has valuable knowledge and grasp, and you want to possess it. However, you must never assume the author has all of his facts, arguments and conclusions right.

As you read down the page you reflect, critique, and relate to other information, knowledge and insight that you possess. Let me illustrate with George Soros’ book, “On globalization”. His words will be in quotations (“ “), and mine in brackets ([ .. ]). George Soros heads Soros Fund Management and is the founder of a global network of foundations dedicated to supporting open societies. (See his biographical sketch at end of this paper.)

“Globalization is an overused term that can be given a wide variety of meanings. For the purposes of the present discussion, I shall take it to mean the development of global financial markets, the growth of transnational corporation, and their increasing domination over national economies.” [Good definition. He emphasizes financial markets and transnational corporations, but does not seem to stress attention to the movement of technology and people. How will he demonstrate that the global corporations dominate nations? To what extent do international organizations, such as WTO mitigate such power?]

“One could also discuss the globalization of information and culture; the spread of television, Internet, and other forms of communication; and the increased mobility and commercialization of ideas.” [He does include other cultural aspects of globalization, but apparently sees them as secondary.]

“Globalization as defined here is a relatively recent phenomenon that distinguishes the present day from 50 or even 25 years ago. At the end of WWII most countries strictly controlled international capital transactions.” [Global trade has been in effect since the time of Christ. More recently in the 1800s most of the money for American railroads came from Great Britain, demonstrating movement of capital. Yet he is correct in that international institutions such as WTO, the IMF, and World Bank were not in place until the 50s to 70s.]

“The salient feature of globalization is that it allows financial capital [money] to move around freely; by contrast, the movement of people remains heavily regulated. Since capital is an essential ingredient of production, individual countries must compete to attract it; this inhibits their ability to tax and regulate it.” [Vital point. This means that countries that need cash for development will be forced to get their act together – i.e. good governance – if they are to get loans and attract investment money. Wonder if the IMF exacts strict criteria, or if they engage in wishful thinking. Recent evidence is that they mainly aim to get the money out the door. Nevertheless, the best performers will attract the most money, and this is good.]

“It was the objective of the Reagan administration in the United States and the Thatcher government in the United Kingdom to reduce the ability of the state to interfere in the economy, and globalization served their purpose well.” [Great, one more thing to thank Reagan for, and more evidence of his collaboration with Thatcher.]

“Capital has always been eager to avoid taxation and regulation, so it is easy to interpret the current tendency to reduce taxation and regulation as merely the manifestation of universally and timelessly valid economic laws. That is, in fact, the dominant view at least in the English-speaking world. I have called it market fundamentalism. It holds that the allocation of resources is best left to the market mechanism, and any interference with that mechanism reduces the efficiency of the economy.” [Good idea to italicize important terms. Market fundamentalism is a valid concept. It is not adequately understood by the typical politician and most of the general public. Regulatory proliferation (the antithesis of market fundamentalism) is proof it is not understood by politicians, and this will be a vital concept in my book. Worse than regulations is the complete government denial of resources, as with oil and natural gas fields.]

“Globalization is indeed a desirable development in many ways. Private enterprise is better at wealth creation than the state.” [The evidence that this is so is overwhelming and most Americans see this. However, what they don’t see is that excessive interference by the state on the free market is stultifying. Here’s where demagoguery, overreaction and ignorance has its play.]

“Globalization offers a degree of individual freedom that no individual state could ensure. Free competition on a global scale has liberated inventive and entrepreneurial talents and accelerated technological innovations.” But globalization also has a negative side. First, many people, particularly in less-developed countries, have been hurt by globalization without being supported by a social safety net; many others have been marginalized by global markets.* … *Economic analyses of the impact of globalization yield mixed results. The World Bank’s Dollar and Kraay find that developing countries with the biggest increase in trade as a percent of GDP post-1980 have experienced higher and accelerating growth compared to their “pre-globalizing” performance and compared to the performance of “non-globalizing “ developing countries. [Some statistics would be clarifying here.] These countries have reduced the income gap with industrial countries. … absolute poverty has declined in the “globalizers.” [Such developing nations didn’t have a “safety net” before globalization. Those that participate experience reduced poverty. So we will have to wait and see how the author lays out the negative aspects of globalization. I doubt that it is globalization per se, but more likely perversion of globalization, such as tariffs and subsidization of certain product groups, such as steel and agriculture.]

“Second, globalization has caused a misallocation of resources between private goods and public good.” [Prove it, where is the evidence. According to international statistics governments have been taking a progressively larger slice of the GNP pie over the past two centuries – with no let up in sight. If, as he stated, globalization expands the economy of participating nations, the larger GNP will expand government revenue for public goods. Presumably this government revenue is used for some “public good”, but at the cost of great inefficiency.] “Markets are good at creating wealth but are not designed to take care of other social needs.” [Not so – globalization increases the national wealth of participating nations and this is the only way to afford such public goods. His statement here is inconsistent with his previous statements]

“The heedless pursuit of profit can hurt the environment and conflict with other social values.” [Obviously, “heedless” would. But that is not what has happened in the world. All, and I mean all, developed countries have done much more to protect the environment than the undeveloped and developing countries. Environmental programs are expensive. He has not, apparently, seen the facts about improvements in the environment over the past 50 years – especially in America. Seems he is vulnerable to environmentalist propaganda.]

“Third, global financial markets are crisis prone. People living in the developed countries may not be fully aware of the devastation wrought by financial crises because, for reasons that will be explained later, they tend to hit the developing economies much harder.” [This negative factor in globalization appears to be valid at first glance. Will be interesting to see how he substantiates this point. Presumably poor nations do not have the financial resources to cushion economic reversals.]

“It is dangerous, however, to place excessive reliance on the market mechanism. Markets are designed to facilitate the free exchange of goods and services among willing participants, but they are not capable on their own, of taking care of collective needs such as law and order or the maintenance of the market mechanism itself. Nor are they competent to ensure social justice. These “public goods” can only be provided by a political process.” [He implies that the market mechanisms, such as financial markets, are irrelevant to “collective needs”, “law and order” and “social justice”. This is clearly not true, as he averred in his earlier statements. Financial markets chase performing and trustworthy nations. That is, the financial markets must see evidence of good governance, and law and order, or they will not invest in those countries – at least when they are behaving rationally. Therefore, the financial market is an incentive for nations to establish such social values. Also, if free trade and other markets improve a nations wealth, this improves the collective good of the public by increasing per capita income. Furthermore, as the nation develops there is a rising middle class that comes to insist on social justice. The impact of markets and their evolution in a developing country are the most effective mechanisms for improvement of the social condition. Not a short run guarantee, however, as a developing nation must first establish the basics of a viable society – rule of law, property rights, etc. – before it can capitalize on market mechanisms and globalization.]

“The task of making collective decisions about what is allowed and what is forbidden is left to politics – and politics suffers from the difficulties of reaching collective decisions in a world that lacks a strong moral code. Even the creation and maintenance of markets requires political action. This point is well understood by market fundamentalists. What is less well recognized is that the globalization of markets without a corresponding strengthening of our international political and social arrangements has led to a very lopsided social development.” [I completely agree. Albert Sweitzer, physician, philosopher, Nobel Peace Prize laureate in 1952, stated in his book, the “Philosophy of Civilization”, that morality is the essence of civilization. That this is the vital attribute of a viable civilization is not broadly grasped by the public or its leaders. This seems to be his central contention – the market system is well developed, but the world’s corresponding social, moral and political institutions are deficient – thereby creating imbalances and injustices in many of the developing countries.]

[Soros makes the following reform recommendations;] “Institutional reforms are needed in the following areas:
To contain the instability of financial markets; [Is this even possible?]
To correct the built-in bias in our existing international trade and financial countries that largely control them; [poor wording]
To complement the World Trade Organization (WTO), which facilitates wealth creation, with similarly powerful international institutions devoted to other social goals, such as poverty reduction and the provision of public goods on a global scale; and [How about a consortium of non-governmental organizations (NGOs? Such organizations are trusted more than nations or international, government-formed institutions.]
To improve the quality of public life in countries suffering from corrupt, repressive, or incompetent governments.” [Again, NGOs. Also, the incentives inherent in a free market will induce improvements in governance.]

[Good points. Tough to implement. Hope he elaborates, and provides specific and achievable recommendations.]

“… Bad governments are a major source of poverty and misery in the world today.” [Bad governance is the entire reason, and bad governance is a function of the moral convictions of the people.]

“… The GDP is not an appropriate measure of human welfare.” [Good point, but if there isn’t a strong correlation between income and human welfare why do we have welfare programs, and why do we decry poverty. The strongest correlate of human welfare, presumably, is happiness. It is doubtful that this is correlated with poverty. More likely it is positively correlated with wealth, human rights, democracy, and such social factors as family solidarity. Soros has bought into an ideological line here.]

“…The trouble is that the winners do not compensate the losers.” [An amazing statement, considering Soros is a billionaire, a supreme winner, has established many charitable foundations, and has written this book to promote compensation to losers. Americans are the most giving (charitable) people in the world, though we don’t lead the industrial nations in federal giving to the poor nations. All of the major figures I work with in charitable boards are relatively wealthy. The poor, in general, show very little charitable activity in my community.]

“Far too few resources have been devoted to correcting the deficiencies of globalization. As a result, the gap between the rich and the poor continues to grow. The richest 1% of the world’s population receives as much as the poorest 57 %. More than a billion people lack access to clean water; 826 million suffer from malnutrition; 10 million die each year for lack of the most basic healthcare. These conditions were not necessarily caused by globalization, but globalization has done little to redress [underline mine] them.”

[Here is where Soros discloses his liberal ideology, which, unfortunately, causes him to disregard both relevant facts and consequential factors. This can happen, as well to the ideological conservative. A growing gap between the rich and the poor is not the important consideration. If the poor double their income while the rich quadruple theirs, is this not a good thing. If the poor remain equally poor while the rich become half as rich, is this not a bad thing. The point is not to achieve equality in income and possessions (which can never happen in an advanced economy), but to achieve the rule of law, protection of private property, a free market system, and moral convictions. These are the political and economic conditions for eradicating poverty -- in a word, good governance. And he is right that we are not doing enough to rectify them. Soros uses the word “redress” which means to “make compensation or reparation for an unfairness, injustice, or imbalance.” Soros must feel the liberal guilt for the condition of the poor. The poor are such because of bad governance, not from what Soros or anyone else in America did. We do have a moral obligation to try to “rectify” these conditions, however.]

[My above comments are not to imply that Soros is a poor writer, or that he is not deserving of respect. He is actively trying to improve the condition of the people of the world, and is spending his wealth doing so. He has been enormously successful as a businessman, and as a person of charitable intentions. I am sure I can benefit greatly from reading his book. Nevertheless, the way to read a book is critically, reflectively, and with an open mind. He will contribute to my edification if I do exactly that.

[Please note that not all of the bracketed reflections occurred as I read, though they were typical of such reflections. Perhaps the majority of my comments occurred during my recitation (going over the material in my mind after reading the written material. This is as it should be in reading a book.)]

Biographical Sketch:
George Soros was born in Budapest, Hungary on August 12, 1930. He survived the Nazi occupation of Budapest and left communist Hungary in 1947 for England, where he graduated from the London School of Economics (LSE). While a student at LSE, Soros became interested in the work of the philosopher Karl Popper, who had a profound influence on his thinking and later on his professional and philanthropic activities.

As financier. In 1956, Soros moved to the United States, where he began to accumulate a large fortune through an international investment fund he founded and managed. Today he is chairman of Soros Fund Management LLC.



Liberal Warfare
By Lawrence f. Kaplan
Wall Street Journal, December 16, 2003

If you think I am hard on liberal thought patterns you haven’t met Lawrence Kaplan, a senior editor at the New Republic and a Hudson Institute fellow. Kaplan is a definitely a different kind of thinker than Soros, and a master of expression and vocabulary. The following are excerpts from that article, and as before, I will interject my thoughts as we proceed with the reading.

“The war in Iraq has generated a cliché’ industry, which, even by the standards of such industries, is distinguished by the absence of any relation to the world we happen to inhabit. [Words do not necessarily represent the actual thoughts of the writers, especially when their intent is to convince you of something they don’t actually believe. And words may be only hazy representations of reality – which is Kaplan’s point.]

“Yet, its platitudes have become canonical among the technocrats [how does he mean ‘technocrats’ here] who populate think tanks like the Brookings Institution [think I will look them up, probably get some good liberal views there], moderate Democrats campaigning on the strength of their national security credentials, and the members of the liberal foreign-policy establishment who presume to advise them [does he think most of our foreign policy people are liberal? – a doubtful generalization]. This establishment does not represent the “Bush is a greater threat than Saddam” crowd, much less the anti-war student who have gone clean for Dean. No, its members have gone, as the saying goes, beyond ideology and into banality [no, I haven’t heard the saying, but it somehow delights the soul].

“Their most recent effort, on display only yesterday in a much-touted Dean foreign-policy speech, is an attempt to transform the candidate from an angry leftist with bad ideas into an angry centrist with no ideas [Wow, is Dean really that bad, or is this hyperbole – I must resist buying his argument or I may defeat my own principles of objectivity].

….”Asked recently what America should do ‘If international forces don’t show up’ in Iraq, presidential aspirant John Edwards replied, ‘Well, I don’t accept that premise.’; But the premise is a fact and pretending otherwise hardly provides an adequate response to the challenges America faces on the Iraqi battlefield [ Happens I heard Edwards say that, and he repeated it later, and I had exactly the same reaction as, Kaplan, but Kaplan expressed it much better – how can I capture some of the magic of his phrasing.] . Kerry claims the administration has been ‘intoxicated with the pre-eminence of American power’ and threatens to take us ‘down the false road of empire.’ [Kerry’s exaggerations are indeed disturbing to a rational mind. It is arrogant to presume to know the inner workings of the President – ‘intoxication’, as he has no basis whatever for knowing the nature of his attitude. The use of the word ‘empire’ is incorrect, and Kerry’s later accusation that the Bush team seems poised to “cut and run” is a complete contradiction to his belief that Bush has aspirations of “empire”. Empire builders do not cut and run.]

PSI Helped Push Libya to Ditch Pursuit of Arms
Wall Street Journal
December 22, 2003

Understanding this article and its profound implications depends considerably on general knowledge – not only of the terrorist threat and the history of the country, but also the dynamics of foreign affairs and of the probable motivations and reasoning of leaders of nations.

“Over the weekend, it was clear that London and Washington were drawing somewhat different lessons from the Libyan experience. U.S. officials are emphasizing the importance of the threat of pre-emptive military action, and especially the Iraq war, in persuading Mr. Gadhafi to come in from the cold. [Such a conclusion would follow from the fact that the Iraq war is predominantly a U.S. initiative, and that we would like to add Libya’s repentance as justification for the war and the wisdom of our actions. Also, Americans are inclined to believe that actions speak louder than words.] Britain, meanwhile, is hailing the virtues of diplomatic engagement and dialogue. [This is typical of Europeans – to choose diplomacy and discussion for lengthy, and even indefinite periods. The level of damage to their countries from wars over the past several centuries, at least, have made them cautious of adventurism.]

“… Much of Libya’s progress on its nuclear program had been made since United Nations sanctions were suspended in 1999, these officials note. [Another illustration that assertive action against rogue states is valuable in restraining their nefarious activities. The use of power over persuasion has its valid place in the armament of fighting terrorism.]

“Within the administration, some officials already are arguing that without obvious and swift rewards for Libya, no other country will be persuaded to follow suit – whether the U.S. demand is giving up weapons programs or renouncing support for terrorism. ‘You can kiss off the cooperation of countries like Pakistan, Sudan, Iran … if we don’t lift the sanctions, the official said. [ Sounds to me like the soft line of our foreign affairs office. I agree with the hard-liners that, ‘First we must ensure full verification and guarantees of irreversibility before any rewards are offered.’ Otherwise, a too swift retraction of pressure on Libya will encourage other rogue nations to believe that mere pretenses of cooperation will be sufficient to get the U.S. off their back – as seems to be the case with Iran now. Furthermore, a true and sustainable rapprochement between our two countries must be based on true agreements.]

“The push to persuade Libya to abandon its pursuit of weapons of mass destruction, which concluded successfully with a surprise announcement Friday, was accelerated by a still-secret interception of weapons of materials under a fledgling international program to block the shipment of illicit materials around the globe … under the U.S. led Proliferation Security Initiative [PSI] helped persuade Tripoli to give up its weapons programs in the face of superior U.S. intelligence and military power. [This is powerful evidence for a hard line against rogue nations. If Gadhafi accelerated his weapons program during the lifting of U.S. sanctions, and now completely reverses direction, there must be a very significant accumulation of reasons for his changing his mind. It is extremely unlikely that it can be diplomacy or dialog, as this has not worked with any tyrant down through history – and I cannot understand the European fixation on this explanation in the face of contrary evidence. Consider the tangible evidence confronting Gadhafi – American rapid and decisive action in Afghanistan, the same in Iraq, deposing and humiliation in the capture of Saddam, resolute statements by the American president that you are either with us or against us, and finally PSI, by interdicting his supplies, rendered Gadhafi’s expensive ambitions in weapons of mass destruction ineffectual. Those who believe that we merely need to talk our way through the terrorist threat will be hard pressed to refute this evidence of success of the hard-line.]


Book Reports

Reading of significant Journals offer “jewels” of pungent insight, and are provocative of thought. One can roam through such magazines as “Foreign Affairs”, “The Independent Journal”, “Harvard Business Review”, “Foreign Policy”, “The Spectator”, “Atlantic Monthly” and numerous others, as well as articles by members of “think tanks” in the Web, looking for such pearls. Selection of articles are often guided by favorite topics, or renown and respected authors. Book reviews can provide compressed summaries of books and frequently offer penetrating critiques as well. For example:

“France is Falling Over”, by Nicolas Baveraz:
Review by Eric Le Boucher, and editor and economics columnist for Le Monde

“In his slim, controversial book French historian and economist Nicolas Baverez proclaims the economic and political decline of his homeland. Not surprisingly, French politicians of all stripes are taking requisite offense. The left, which governed the country from 1997 to 2002, faces accusations that it contributed to the decline through misguided social “innovations,” such as the 35-hour work week, introduced precisely as global economic norms demand higher worker productivity. And the right, currently in power, remains paralyzed by fear of social protest and does not dare implement the reforms needed to invigorate the economy. [Thus stating succinctly much of the economic predicament of present day France. One can speculate on the power of the people (democracy) to prevent, rather than support their leaders in making wise decisions. This is comparable to Americans resisting the undoing of the failed “Great Society” welfare program. It had to wait until its dysfunctions were so great as to become obvious and painful to a large segment of Americans.]

“… The book also resonates with the business community, which has long believed that lazy government officials and public-sector unions stunted progress. ‘For the moment, we have no political project, or leaders to carry it out,’ Baverez explained in a recent interview. ‘Neither American growth, nor Europe, will reform France today. It is up to the French to reform their country.’ [A fairly universal belief of Western businesspeople, as such reluctance is representative of the special self-interests of such groups. Unless there is great leadership, sufficient to surmount their resistance, corrective government decisions remain stunted.]

“… France’s proud diplomatic rhetoric… imagines itself a privileged interlocutor between the major powers … a revitalized Britain … the democratic awakening of Central and Eastern Europe …[pithy streams of descriptions representing contemporary forces that the author believes go unrecognized or unresponded to by France’s leaders.]

“… Incapable of adjusting its diplomatic posture in the face of ethnic violence and the growing pre-eminence of South Africa …[Growing ethnic violence I suspected, but pre-eminence? Why? Why does the author see South Africa as a threat to France, or perhaps a paramount concern? Watch for thoughts of other writers on this.]

“…Criticizes Chirac for aligning France with Germany’s pacifisms [George Bush could have written this critique] … undermined the U.N. and isolated France … quashed any hope for French multilateralism [now here is a paradoxical idea – Chirac, the great multilateralist weakened multilateralism by criticizing Bush’s unilateralism, and by rejecting the views of Eastern European leaders was himself behaving in a unilateral manner. How the great may be blown away by their own petard.] … denial forbidding any constructive propositions …

“ ..a nation that talks a talk it cannot walk … average economic growth of 1.8% compared to 2.8% among the world’s rich nations [Accumulates disaster and ultimately will deny the French of their ‘enlightened social policies’ of which they are so proud] …

“…suffocates its private sector with taxes while the sprawling state distributes fictitious social rights at the expense of a ballooning national debt that already surpasses 60% of its GDP [U.S. national debt is 66%. .France’s self-deception is not as great as Germany’s, that are now bribing its unemployed over the age of 50 by paying them indefinitely on unemployment providing they agree to remove themselves from the job market. The French, in mandating a 35-hour workweek denied even the fundamental reality of incentives and of the healthy expression of human industriousness. Horrible thinking.]

“… Trapped in its statist model, Baveraz contends France is stagnating by refusing to open its eyes. [France is about to demonstrate the poverty of the statist model as did the U.S.S.R. with the communist model. Absolute security absolutely enervates the people. The necessity of necessity in human motivation cannot be denied.


“Nice Work if You Can Get It”
by Robert B. Reich
Wall Street Journal, December 26, 2003

Mr. Reich was former secretary of labor in the Clinton Administration, a Rhodes scholar, and now professor of social and economic policy at Brandeis. Mr. Reich is responding to the many comments made, between 2000 and 2003, about job losses in this country (largely uninformed). It is refreshing to read a work by someone who has the credentials to understand the issue in a comprehensive sense.

“It’s hard to listen to a politician or pundit these days without hearing that America is “losing jobs” to poorer nations – manufacturing jobs to China, back-office work to India, just about every job to Latin America.” [That’s exactly the chatter we have heard ad nauseum] “This lament distracts our attention from the larger challenge of preparing more Americans for better jobs.” [What better jobs will he cite? Will he tell us how to prepare, or how we are not adequately preparing?]

“Most job losses over the last three years haven’t been due to American jobs ‘moving’ anywhere. They’ve resulted from an unusually long jobs recession, which, hopefully, is coming to an end. [What does he mean by a “jobs recession” –an outcome of the general recession, or does he see elements in the economy that specifically affects jobs?] “We can debate whether the Bush administration has done enough, or the right things, to accelerate a jobs recovery. [No president, no administration can do all of the right things – most of the factors underlying economic fluctuations are not government induced – such as innovation, and other cyclical events. So a president cannot legitimately take much credit or blame] “But job growth eventually will resume, as aggregate demand bounces back.” [He sees job development as primarily based on demand and not supply – we’ll see where this goes.]

It’s true that U.S. manufacturing employment has been dropping for many years, but that’s not primarily due to foreigners taking these jobs. Factory jobs are vanishing all over the world. Economists at Alliance Capital Management [Go to Web, maybe add Alliance site to “favorites”] took a look at employment trends in 20 large economies and found that between 1995 and 2002, 22 million factory jobs had disappeared. [Good stuff – worldwide phenomenon.] The U.S. wasn’t even the biggest loser. We lost about 11% of our manufacturing jobs in that period, but the Japanese lost 15% of theirs. [Wonder if he knows it’s primarily due to improved productivity.] Even developing nations lost factory jobs: Brazil suffered a 20% decline, China a 15% drop.” [They can’t blame that on Bush]. What happened to factory jobs? In two words, higher productivity.” [He does know] I recently toured a U.S. factory containing two employees and 400 computerized robots. The two live people sat in front of computer screens and instructed the robots. In a few years this factory won’t have a single employee on site, except for an occasional visiting technician who repairs and upgrades the robots, like the gas man changing your meter.” [Fascinating example. Wonder what nanotechnology will add to this scene]

“Manufacturing is following the same trend as agriculture. As productivity rises, employment falls because fewer people are needed. In 1910 a third of adult Americans worked on farms [as about 50% of Russians today]. Now fewer that 3% do. Since 1995, even as manufacturing employment has dropped around the world, global industrial output has risen more than 30%. [Wow! In just 8 years 22 million jobs have been lost and yet manufacturing output has gone up 30%. I read recently that this rise in manufacturing output has gone up even more dramatically in the U.S. – but, then, we are the leader in productivity improvement.] “In China, modern factories are replacing inefficient state-sector plants. China produces more goods than ever before, but millions of Chinese factory workers have lost their jobs.” [Such productivity improvements will raise their incomes and produce a larger middle class, with greater pressure for evolution of democratic forms.]

“We should stop pining after the days when millions of Americans stood along assembly lines and continuously bolted, fit, soldered or clamped what went by. Those days are over. And stop blaming poor nations whose workers get very low wages. Of course their wages are low; these nation are poor. [On the mark. And they compete intensely for these “low paid” American jobs] “They can become more prosperous only by exporting to rich nations.” . [Or, individually more prosperous by getting a higher education, as is common in India.] “When America blocks their exports by erecting tariffs and subsidizing our domestic industries, we prevent them from doing better. Helping poorer nations become more prosperous is not only in the interest of humanity but also politically wise because it lessens global instability.” [Why do large blocks of Americans continue to listen to and vote for the protectionists – its unconscionable? We hear from the extremists three conflicting accusations: 1) That we are not doing enough for the poor countries; 2) that jobs at American –owned companies are poorly paid and under horrible working conditions; and 3) that we are shipping good jobs overseas. The facts are that the pay at such jobs in these poor nations average about 60% more than local jobs – according to the National Bureau of Economic Research, and that multinational corporations are more likely to invest in countries that have established human rights and other protections.]

“Want to blame something? Blame new knowledge. Knowledge created the electronic gadgets and software that can now do almost any routine task. This goes well beyond the factory floor. America also used to have lots of elevator operators, telephone operators, bank tellers and service-station attendants. Most have been replaced by technology. Supermarket check-out clerks are being replaced by automatic scanners. The Internet has taken over the routine tasks of travel agents, real estate brokers, stockbrokers and accountants. With digitization, high-speed data networks and improved global bandwidth, a lot of back-office work can now be done more cheaply abroad. Last year, companies headquartered in the U.S. paid workers in India, China and the Philippines almost $10 billion to handle customer service and paperwork. [How many would be willing to lower their standard of living to force those jobs back into our economy.]

“Any job that’s even slightly routine is disappearing from the U.S. But this doesn’t mean we are left with fewer jobs. [What convincing evidence will he present to support this assertion.]? “It means only that we have fewer routine jobs. When the U.S. economy gets back on track, many routine jobs won’t be returning -- but new jobs will take their place. A quarter of all Americans now work in jobs that weren’t listed in the Census Bureau’s occupation codes in 1967.” [Astounding, not just job growth, but entirely new kinds of work will provide the impetus for job expansion.] “Technophobes, new-Luddites, and antiglobalists be warned: You’re on the wrong side of history. You see only the loss of old jobs. You’re overlooking all the new ones.”

“The problem isn’t the number of jobs in America; it’s the quality of jobs. Look closely at the economy today and you find two growing categories of work – but only the first is commanding better pay and benefits. This category involves identifying and solving new problems. Here, workers do R&D, design, and engineering. Or they’re responsible for high-level sales, marketing and advertising. Or they’re responsible for high-level sales, marketing and advertising. They’re lawyers, bankers, financiers, journalists, doctors and management consultants. I all this “symbolic analytic” work [great term to assimilate. Suggestive of abstracting and model building, advanced education, and accent on education] because most of it has to do with analyzing, manipulating and communicating through numbers, shapes words, ideas. This kind of work usually requires a college degree.”

“Over the long term, symbolic analysts will do just fine, as long as they stay away from job functions that are becoming routinized. They will continue to benefit from economic change. Computer technology gives them more tools for thinking, creating and communicating.” [Three key words, “creating,”, “thinking” and “communicating”. We don’t have specific courses to teach them, so they will have to be embedded into other courses. However, I doubt that the K-12 educational community grasps this as fundamental of job preparation in our future economy.] “The global market gives them more potential customers for their insights [leveraging talent, a significant part of the exponential knowledge curve in the world]. To be sure, symbolic analysts are popping up all over the world [the ambitious are no longer trapped just because their country is poor and backward.] “More than half of all Fortune 500 companies say they’re outsourcing some software development or expanding their own development centers outside the U.S.” [Globalization is not a choice to be made, or a choice to be undone. It is now institutionalized into the world economy.] “But apart from recessions, demand for symbolic analysts in the U.S. will continue to grow faster than the supply.” [This is powerful stuff. If America is to remain the leader of the knowledge age it will have to incorporate this emphasis on “symbolic analytic” capability into the development of our youth. What can I do in this matter with my “Study Skills” course, and the mentor programs I am working on? Wonder what Reich has thought about our educational system.]

“No other country does a better job preparing its citizens for symbolic analysis [He has thought about it.] Our universities are the envy of the world. And no other nation surpasses us in providing on-the-job experience within entire regions specializing in one or another kind of symbolic analytic work (New York for finance, LA for music and film, Silicon Valley and greater Boston for science and bio-med engineering, and so on). Besides, there’s no necessary limit to the number of symbolic analytic jobs because there’s no finite limit to the ingenuity of the mind or to human needs.” [Marvelous statement. We can eat only so many hamburgers, but there are no limits to imagination and its applications and enjoyment. We can feed the country with 2% of our population and use the other 98% to enrich the human race.]

“The second growing category of work in America involves personal services. Computers and robots can’t do these jobs because they require care or attentiveness.” [I buy the general idea, but how much care, compassion, and attentiveness can one get from ones doctor on a 5-minute interview; or from most other service positions. We’re growing more of these jobs, but somehow the humanity is missing.] “Workers in other nations can’t do them because they must be done in person. Some personal-service workers need education beyond high school – nurses, physical therapists and medical technicians, for example. But most don’t, such as restaurant workers, cabbies, retail workers, security guards and hospital attendants. In contrast to that of symbolic analysts, the pay of most “personal-service” [remember this term] workers is growing quickly, as more and more people who’d otherwise have factory or routine service jobs join their ranks. Legal and undocumented immigrants are also pouring into this sector.” [However, it’s important to keep in mind that a very large number do not remain in these jobs – they flow through, and often into the “symbolic-analytic” jobs or higher-credentialed service jobs.]

“But America’s long-term problem isn’t too few jobs. It’s the widening income gap between personal service workers and symbolic analysts. The long-term solution is to help spur upward mobility by getting more Americans a good education, including access to college.” [Totally agree. However, we are doing a great job in access to college, and a poor job with public education in K-12, due to self-interested political influence groups, such as the teachers unions.] “Unfortunately, just the opposite is occurring. There will be plenty of good jobs to go around. But too few of our citizens are being prepared for them.” [Part of the reason is that they are becoming less attractive. How can an informed and talented young person be interested in medicine today with the complexifications imposed by government, and the hassle and income-threatening attacks by the tort attorneys.] “Rather than fret about “losing jobs’ to others, we ought to be fretting about the growing number of our young people who are losing their footing in the emerging economy.”

[The “footing” the young are losing is the stable ground of lasting institutions, such as marriage, religion, moral upbringing, integrated and stable communities. How can they find their footing in such an uncertain base? What we are missing is an appreciation of the importance of “social capital”, most of which is built on moral commitment.

Mr. Reich’s article is excellent, and I would imagine he would be quite able to add his thoughts to many of the questions I raised. However, his statements supporting pro-choice on abortion, seeing that issue in terms of “reproductive rights” and ignoring the lost rights of the unborn, leads me to surmise that he does not grasp the necessity of a strong moral foundation for our society – or has rationalized the issue to gain votes – which is demonstrating the same thing. Furthermore, Mr. Reich has continued to cite a discredited study by economists David Card and Alan Krueger that appeared to find that minimum wage laws have no effect on low-skill employment. This study was found to be based on skewed and in some cases false data.]

“Iraq’s False Promises:
by Slavoj Zizek
in Foreign Policy, January/February 2004

Mr Zizek is a philosopher and senior researcher at the Institute for Social Studies in Ljubljana, Slovenia.

Mr Zizek begins his article by equating the Bush national security doctrine with Freud’s interpretation of dreams, thus implying that our foreign policy in nothing more than illusions of grandeur. I will quote only certain passages of the article.

“A similar string of inconsistencies characterized the Bush administration’s public justifications for the U.S. attack on Iraq in early 2003. First, the administration claimed that Saddam Hussein possessed weapons of mass destruction (WMD), which posed a “real and present danger” to his neighbors, to Israel, and to all democratic western states. [Virtually the entire world intelligence community believed at the time that he still had them, a conclusion based on the facts that he had used them extensively against his own people and his neighbors in prior years, that the U.N. inspectors found large quantities of them during the 1990’s, and that he refused to disclose how he had destroyed the remainder when he threw out the U.N. inspectors in 1998. The author either understands nothing of this history, or, perhaps, due to his ideology, refuses to incorporate these facts into his thinking.]

“So far, no such weapons have been found (after more than 1,000 U.S. specialists have spent months looking for them). [Whole MIGS were found buried in the sand, as well as thousands of tons of munitions. Furthermore the means for producing the weapons of mass destruction were found, the government scientists and the programs were found, and since they are above ground, are the easiest to locate.]

“Then, the administration argued that even if Saddam does not have any WMD, he was involved with al Qaeda in September 11 attacks [no he didn’t] and therefore should be punished and prevented from launching future assaults [The presence of some al Qaeda elements in Iraq during this period, as well as other terrorists has been proven, and there were more of them entering the country in 2003. Saddam’s support to terrorists in Palestine was open and evident. As the president did say, their ties to 9/11 has not been demonstrated, but such a tie was always speculative by the administration, and did not figure prominently in the president’s decision to invade Iraq. What he also said was that Saddam was a “grave” threat, a statement similar to those made by the Clinton administration.]

“… Finally, there was the third level of justification, that even if there was no proof of a link with al Qaeda, Saddam’s ruthless dictatorship was a threat to its neighbors and a catastrophe to its own people, and these facts were reason enough to topple it. [Yes, and the General Secretary of the United Nations, Kofi Annan, is also studying the whole question of national “sovereignty” from a humanitarian perspective – i.e. that the civilized world has the right and the obligation to intervene in failed states, and that continued regarding the internal matters of such states as the exclusive prerogative of its leaders is unsound – especially in this global age when all nations affect one another.]

True, but why topple Iraq and not other evil regimes, starting with Iran and North Korea, the two other members of Bush’s infamous “axis of evil”? [Is he recommending we do this, or is it simply rhetoric to imply inconsistency, or equivocation on the part of the Bush administration? Iran’s Ayatollas may need to be toppled if they don’t desist in their nuclear ambitions. However, the country has been progressing toward greater democratic forms, and 75% of its citizens disapprove of the present theocracy. Hopefully, the people of Iran will find their own solution. Therefore, there is adequate grounds for treating Iran differently. North Korea is being dealt with by a partnership of Japan, South Korea, China, and Russia. As the contiguous neighbors of North Korea, their involvement and prerogatives in the solution of that country is evident and justified. Again, there are good reasons to treat North Korea differently.]

“So, if these reasons don’t hold up to serious scrutiny [underline mine]and merely seem to suggest that the administration was misguided to do what it did, what, then , were the real underlying reasons for the attack? [The author didn’t hold up his own reasoning for serious scrutiny.] Effectively, there were three: first, a sincere ideological belief that the destiny of the United States is to bring democracy and prosperity to other nations [Yes]; second, the urge to brutally assert and signal unconditional U.S. hegemony [the term ‘brutal’ gives away his extreme liberal leanings.]; and third, the need to control Iraqi oil reserves.” [Not ‘control’, as that implies a preference for coercion – rather we desire assurance of oil, as does all of the oil using countries. And, the oil-producing nations have as much need, even greater, for our money as we do for their oil. Assurance of continue oil supplies is a win/win.]

“Americans have historically seen their role in the world in altruistic terms. ‘We just try to be good,’ they say, ‘to help others, to bring peace and prosperity, and look what we get in return.’ …. The supposition underlying these good intentions is that underneath our skins, we are all Americans. If that is humanity’ true desire, then all that Americans need to do is to give people a chance, liberate them from their imposed constraints, and they will embrace America’s ideological dream.” [We are not so naïve, and we have low expectations of the positive effects of our foreign aid. That’s why Congress votes so little of it. That’s why countries like his Slovenia criticize us for being the stingiest nation on earth. Nevertheless, even that accusation is not true. Americans give to other nations predominantly through non-profits (and indirectly through assimilating large numbers of immigrants), rather than, as with most other nations, through government. American private, non-profit assistance to other nations exceeds in total dollar amount the collective total of the next five most generous nations. The same people who criticize America for inadequate foreign aid also criticize us for attempting to correct the poor governance that is the cause of the need for aid. There are grounds, however, for criticizing the poor results from foreign government aid by Western governments, as it has had little constructive effect, and is extended largely for other than humanitarian reasons.]

This author has disclosed his anti-American bias as well as his reasoning through ideological blinders. The author, after having assumed, and not demonstrated, the absolute truth of his preconceptions continues to employ these assumptions to explain why the Bush administration foreign policy is so misguided. There is little value in reading further unless one wishes to punish one’s mental sensitivities.]


Brazil’s Balancing Act
By Elizabeth Johnson, historian and free lance journalist
Of Estudos Avancados (Advanced Studies)
Foreign Policy, Jan/Feb 2004

This is a brief article about the proposed Free Trade Area of the Americas (FTAA) that would be a natural follow on to NAFTA, which includes just the U.S., Canada, and Mexico as a free trade area.

“How badly will the recent breakdown of the World Trade Organization (WTO talks in Cancun) affect the ongoing negotiations for a Free Trade Area of the Americas (FTAA), a project that is supposed to create a single free trade zone among 34 nation in the Western Hemisphere by 2005.” [Interesting, 34 countries. Wonder how many people this represents. Also wonder about the impact on poor countries, and in what way might the powerful countries upset stable, though very poor economies and traditions. Perhaps this is just the jolt they need to move into the 21st century.]

“To a large degree, the answer hinges on Brazil, Latin America’s largest economy [equals us in size and population too] and a key player in the coalition of developing countries that challenged rich nations in Cancun [Have not understood their objections. Perhaps this article will explain. Something to do with special advantages the U.S. wanted?] “A recent issue of the bimonthly Estudos Avanmcados, a journal associated with the University of Sao Paulo,sheds light upon the assumptions Brazil brings to the FTAA negotiating table and highlights the lively debate among Brazil’s business community, government, and civil society over the merits of the regional trade pact.”

“During Brazil’s 2002 presidential campaign, then candidate Luiz Inacio Lula da Silva famously warned that the FTAA would represent a U.S. “annexation” of Brazil.” [What a piece of demagoguery. Feeds the ‘lets hate America’ fun. Is it inevitable that to win elections the politicians must deceive their public?] “However, in the article ‘The PT Government and the FTAA: Foreign Policy and Pragmatism,’ Amancio Jorge de Oliveira argues that President Lula has adopted a “pragmatic” position on the trade agreement.” [By all means, once he’s one the election he certainly should consider practicalities, reason and good sense.]

“Oliveira, who directs the Center for International Negotiation Studies in Sao Paulo, explains that Lula has moderated his trade views once in office, [of course, immoderation only works when running for office], taking a more proactive stance [“proactive”, now that’s a euphemism if I’ve ever heard one – now that I’ve shown you how I can slay the American dragon I’ll next show you how I can tame those big guys with forward thinking. Why do people tolerate this?] in the ongoing FTAA negotiations and arguing that Brazil must combat protectionism and expand export markets [Did da Silva ever think of informing the citizens about this when he ran for president?]

“Oliveira notes that the Catholic Church and organized labor groups in Brazil have been the most vocal in their opposition to the agreement [ labor has always been protectionistic, but why the Catholic Church?]; they cite loss of sovereignty and fear that Latin American countries will become subordinate to the interests of the United States. [That’s a universal concern, even to U.S. citizens.] Moreover, some industries in Brazil – such as the chemicals, electronics, and capital good sectors – also worry that the FTAA could be a losing proposition.” [They better be concerned. Brazil has had perhaps the most protectionist trade policy in all of the Americas, thereby leaving those industries untouched by international competition. Consequently, their computer industry is at least a decade behind the rest of the world. Also, that’s why they remain poor. They have not fully reaped the standard of living advantages of the communications and knowledge age.]

“However, the author contends that most of the Brazilian business community prefers to forge ahead with the agreement rather than risk losing out on increased commerce in the Americas. Oliveira warns that if Brazil backs out of the negotiations, the U.S. will simply negotiate bilateral treaties throughout the region [as they have already done with Chili] which could pare Brazilian exports and divert foreign investment to other markets” [Certainly, advantages will accrue to those who sign free trade agreements. Research has shown that all countries that elect free trade have GNP growth substantially higher than those who remain protectionistic.] “Oliveira believes that Lula and the moderates in his party understand that Brazil would pay a high price for isolation.”

“Economist Paulo Nogueira Batista of the Getulio Vargas Foundation offers a contrasting perspective, arguing that Brazil has much more to lose through the FTAA than it has to gain, and that the United States would be the treaty’s primary beneficiary.” [Both will win in the long run, but likely the U.S. will gain more at first.] “In particular, Nogueira believes that Brazilian industries are unprepared to take on North American producers” [Of course. The consequence of past protectionism. So apparently the Vargas Foundation would like to perpetuate this backward policy.] “High domestic interest rates, poor infrastructure, and excessive taxation leave Brazil’s businesses at a disadvantage. Can anyone in their right mind argue that our companies can compete as equals against the U.S. and other developed nations?” [That’s why they can’t compete. They have been protectionistic for years. Furthermore, other government mistakes figure into this – high taxation, which is embedded in the price of goods and services; poor infrastructure, because they will remain poor as long as they don’t compete; high domestic interest rates because of bad governance. They will need some leeway to allow some of their backward industries to try to become competitive – just as Bush did with our steel industry – our own version of protectionism.]

[Well, the rest of the article doesn’t add much, other than that there are other states that love protectionist postures and get some satisfaction from standing up to the American ogre. Likely, the need to join the free trade world will overwhelm their concerns. Not sure I learned much from this article except to learn that Brazil has a pretty good handle on the defects of their economic and governance systems. Wish them well, but it would help if someone down there would speak the truth to their public.]

Hope Trumps Anger
By Al From
Wall Street Journal, January 6, 2004

The following is a part of an article by the CEO of the Democratic Leadership Council. One has to be prepared for considerable partisan slant in reading his statements. My reflections on his statements will be much more exhaustive in this reading.

“President Bush demonstrated time and time again that he is more interested in gaining partisan advantage than in putting our country first.” [What evidence will he give for such as assertion? It’s difficult to prove what the president’s “interest” (i.e. motives) are without knowing all or at least a great deal abut the issues confronting the president and the various alternatives presented to him as feasible solutions. But I will give the author an opportunity to make his case.]

“He’s undermining the ethic that built the middle class by taxing work and rewarding privilege.” [Here is another conclusion without evidence. His statement contains no facts, essentially it is Democratic dogma. What ethic is he referring to? Presumably he means “hard work” and that taxing it is a disincentive. However, Bush’s two tax revisions reduced taxes for all classes, including the middle class, so the factual evidence is exactly opposite of his claim. Wish he would define what he means by “middle class” Those in the top 10% of income pay 71% of all federal income taxes (an increase from 69% during the Clinton administration.) The bottom 20% in income pays no federal income tax, so this leaves 70% of those toward middle income to pay just 29% of the taxes. In what way is l0% paying 71% a reward to the “privileged”, and 70% paying 29% a disincentive? And in what manner is a highly successful surgeon in the top 10%, or a successful entrepreneur -- both of whom may work 60 or so hours per week – privileged? To be privileged presumes that they have been granted some special rights by some authority, and have not earned their advantages through their own “hard work”.]

“He’s lost jobs, lowered incomes and increased poverty.” [The economic decline began in the last year of the Clinton administration, is well known by knowledgeable observers to be due to cyclical, and other forces in the economy having little, if anything, to do with the decisions of either presidents Clinton or Bush. The consequence, lost jobs, is the effect of these recessionary factors – not Clinton or Bush.]

[“Lowered Incomes” – the incomes of those who kept their jobs (94% of the working population) continued increasing at about 3% per year during the first three years of the Bush administration, so one cannot factually claim that Bush lowered incomes, or even that incomes were reduced.]

[As to “increasing poverty”, does he mean that more of the population has moved into some statistical income category such as “under $10,000” per year? Is a momentarily unemployed engineer who had been earning $120,000 per year now to be categorized as a member of the poverty-stricken? Without his definition of “poverty”, and corresponding statistics, there is no way to make sense out of his assertion.]

“His fiscal policy – tax less, spend more, ignore the future – has taken America off the road to solvency, put it on the road to bankruptcy, and robbed us of the resources we’ll need to tackle the key challenges we’ll face.” [Wow, this is a sweeping claim, full of ambiguities. I can only begin to evaluate his statements His statement, “tax less” is inconsistent with his earlier criticism of Bush “taxing work” (of the middle class). If bush is taxing less, is he not taxing less of the work of the middle class – and he is.

[“Spend more” – spend more on what? If the president decides to spend more on the security of our country, and there are good grounds for doing so, why isn’t this appropriate? If the president wishes to spend more to support the agribusiness, especially the tobacco farmers, I haven’t seen a plausible argument by this administration to justify it, or from the previous administrations. But this concern about government spending applies to all Democratic leaders as well as Republican leaders. Spending is not even the point – rather justification for the program, management, measures of results, outcomes – all are necessary to legitimize expenditures. Having a nice sounding program is not convincing. In any event, spending approval is required by congress and is not the sole decision of the president.

[“Bankruptcy” – is a hyperbolic claim and deserves no further thought. “Ignoring the future” is in the same category. “Robbed us of the resources we’ll need to tackle the big challenges we’ll face” – presumably he means the “financial resources” we will need in the future to support the validated needs of the American public. This is essentially a function of having a growing and internationally competitive economy. The president’s fiscal policy and that of the independent Federal Reserve Board is designed to achieve a growing economy. It grew about 4 to 5% in 2003, is forecasted to grow from 4 to 6% in 2004, so facts and near term projections appear to support the presidents decisions. The growing government debt (now about 66% of our GNP) is a valid concern in relation to our long-term financial health and the president has made its reduction a high priority in 2004. In my view the addition of pharmaceutical drugs to Medicare is inconsistent with a sound budget, and we have not dealt with the changing demographics of the coming retiree boom. But neither did the author deal with these specific issues.

[The author, in formulating his argument presents as evidence claims that are factually untrue, and then expects the reader to accept his conclusions. Either the author is uninformed, misinformed, or intends to deceive those who are. There is little point in reading further as the author has demonstrated he is not equipped to increase my knowledge of the subject matter.]


New Eyes on Community
By Suzanne W. Morse, Ph.D.
Pew Partnership for Civic Change
2003

The Pew Partnership has studied ways to enhance community effectiveness for the past 40 years. This pamphlet, issued by the University of Richmond, describes the findings accumulated by working with hundreds of communities and thousands of volunteers and professionals, to identify specific leadership and intervention actions that work in achieving community change. The vital questions in such as questions include:
- What specific intervention actions worked effectively?
- What were the procedures for identifying and developing leadership?
- What was the role of the professionals?
- What were the predominant insights that came out of this project, and how might I apply them to my community activities?
- Are there additional sources of information that this pamphlet could lead me to that would add to my understanding?
The primary orientation to such writing is a search for “pearls”, rather than a critical appraisal.

“Over the past forty years or so Americans have tried every conceivable intervention in our search for sustainable ways to improve our communities.” [Inherently difficult due to rapid turnover of volunteers who often have little substantial training and education for the projects.] “We have torn down and we have built up. We have created new theories of change and discarded the old. We have invented program after program, each one touted as the silver bullet, only to see them fall short or wide of the mark. [Much the same as I’ve seen.] There have certainly been some successes, but in reality not nearly enough. And while we all know that we can and must do better, we are not always sure which actions to take. The Pew Partnership for Civic Change for more than a decade now has been asking question and seeking answers related to community well-being.” [Their mission is much like our community foundation – community enrichment.] We hope that this retrospective [interesting term], while by no means a detailed account of our work, will inspire others to renew their own efforts while learning from both our successes and our mistakes. [So they will identify what works and their dead alleys.]

“Community challenges cannot be addressed by a one-size-fits-all solution.” [Self-evident.] However, there are ways to improve the odds for positive results, and our task over the past decade has been to learn those ways and to share them with others. The Pew Partnership was established by the Pew Charitable Trusts in 1992 and since it’s founding has served as an intermediary grant maker, technical assistance provider, and catalyst to almost fifty communities [Wow, big, ambitious operation. Should be some meat here.] Through defined project, to hundreds more through our expanded leadership work [training?], and to literally thousands through our extensive dissemination network [such as this pamphlet, I suppose, which I received gratuitously.] Collectively and individually, these partnerships and associations have given us new eyes on old problems, in more than just a figurative sense.

“We have completed four major initiatives in these eleven years of work. The original Civic Change Project worked with fourteen small cities on their toughest issues. [Such as?] It was followed by the Pew Civic Entrepreneur Initiative (PCEI), [entrepreneur in what sense, as I understand this as having business connotations.] which selected ten midsized cities to test new strategies for leadership development. [Is leadership the vital factor?] The Wanted: Solutions for America Project matched nineteen community programs with academic researchers to test and disseminate solutions that really work. [Good strategy.] Finally, LeadershipPlenty is an ongoing project that works with hundreds of communities and organizations to provide access to civic leadership training for every American. While these are all stand-alone projects, each one has built on the knowledge of its predecessors, and the summaries that follow are ordered according to the succession of ideas rather than strictly chronologically. The Pew Partnership is part lighthouse, part laboratory, and part library [what do they mean by this analogy, seeking, experiment and documenting?] – seeking out, testing, and illuminating ways that communities can ensure a better future for their citizens [“illuminating” better than “documenting”]

[This is huge. Unlikely they will answer my initial questions in only 15 pages. I’ll try switching to scanning to see what, if any pearls they will give me, and where I can find more about their findings.]

“… Solutions take time and patience, not three-year grant cycles [we make that mistake in our community] and community investing done well provides the catalyst for change, and it is not the change itself. In other words, projects don’t change communities – people do. [Now, this is a meaty thought] Change, as we have come to understand it is driven by three factors: individual commitment [underline], community capacity [do they mean resources such as volunteers, money, technology?] and the collective will [How does one know its there, or how to develop it? But it’s all people factors. Is there a difference between commitment and collective will? Hitler certainly got commitment from an inner core of people, and structured a collective will. How did he do it? And it wasn’t even supported by a moral vision, or was it presented as though it was?]

“…the most demanding of issues: rural economic development, affordable housing, and cultural diversity [universal problems] … diversity was the key to their eventual success [perspective variety] … we learned the importance of collaboration.

“… around the region’s long-time crafts heritage [capitalizing on strength, like Peter Duckers definition of management, ‘to make strengths productive and weaknesses irrelevant.’] … Santa Fe, one of the most expensive housing markets in the nation [like Seattle] … worked with local government and nonprofits [good partnership] to find a housing strategy that would place and keep families in affordable homes and connect them to the community [done this here, but connecting to community – and idea that deserves more explanation.]

“… learned from all fourteen of our partners that positive change in a community comes from many different corners. Sometimes it requires an outside stimulus [I’ve assumed that, as the Kitsap Community Foundation thinks of itself as a catalyst.] but more often than not we found that what a community needs is an attitude shift [confidence-building?]: to take hold of its future and believe that average citizens, community organizations, schools, and other can actually change something … all 14 saw tangle results of diverse groups of individuals and organizations working together for common purposes … two characteristics present in the most successful cases that seemed to make all the difference: strong leadership at all levels and a viable community-convening organization … led us to … the Pew Entrepreneur Initiative [to ensure these two factors were present?] …that every community has an abundance of citizens who do not call themselves leaders but whose talents are critical to the long-term success of the community [Ah, here is the pearl. The leaders are in every community, identify them, train them. How?]

“… The project included ten mid-sized cities in which a variety of community organizations – a community foundation, a volunteer center [Volunteers of America unity?] a humanities council [what’s that”] and a United Way, to name just a few – were asked to recruit a class of twenty participants who were recognized as potential leaders in their own communities … ‘civic entrepreneurs’ … who worked on projects in their communities, then brought together with participants from the other cities at a Pew Partnership =sponsored national conference, where they received skills training and shared their successes and failures with their colleagues. .. repeated three times in three years. … with trained facilitators … alumni have been elected to school boards, city councils, and state legislatures .. learned all must have certain baseline skills [the training?] in order to move forward…. Like asset-building, strategic partnership development, meeting management, public relations, and evaluation capacity is necessary [Now I see how they conducted their research. How did they train these leaders in these skills? Must be in their Web site.]

“LeadershipPlenty is a nine-module training program around the country … worked with local partners [call them on this, any around here? Could use this in our “Success Foundation”.] … Cincinnati Youth Collaborative … mentoring program [see their Web] … the one that made the best case [mission clarity] about the issue they were addressing invariably enjoyed greater success. [Vital point] . the local media, local government, and key players in the educational system all know and understand the program, its goals, and its dreams.

“… what will it take to put our collective wisdom, energies, and resources together for sustainable change at the community level? … they are organic [unfold in a natural way given] the proper conditions.

“… communities can prosper if it is thinking simultaneously and over the log term about five separate but interrelated issues:
- the well-being of children and families
- the availability of living-wage jobs
- the importance of safe and affordable places to live
- access to capital of all types financial, social, and human [great]
- and the presence of strong networks of leaders in every part of the community.

… Americans have the will, capacity, and resolve to create different futures…
… new eyes with which to see …

[Great program. Going to their Web site. Seems to me they have tools applicable to every community.]]

Setting the Table for the ’04 Election
By Albert R. Hunt
The Wall Street Journal
February 5, 2004

[A liberal commentator of The Wall Street Journal wrote this article.]


Josh Bolten is the director of OMB, but the architect of this week’s Bush budget is Karl Rove. [How would he know?]

In terms of policy, the 2005 budget proposal is duplicitous, shortsighted and inequitable. [An opinion. Let’s see if he can back it up with evidence.] The promise to halve the $521 billion deficit in five hears is a fraud; [Again, how would he know. Considering the economy, at 4% growth is likely to be larger by about 20%, the additional tax revenue will be about $400 billion larger by 2008, so a 50% reduction is attainable] in a time of war, sacrifices are asked of the poor while new benefits are bestowed upon the rich, and even by Washington budgetary standards the gimmicks are omissions are stunning. [It’s difficult to find any completely innocent parties here, considering there are over 7000 pork items in the budget approved by Congress. Considering the poor (lowest 25% in earnings) pay no taxes, what can he mean by “sacrifices of the poor”. And what specifically are the “new benefits bestowed on the rich”. The richest 1% pays about 23% of the total taxes.]

As a political document, however, it neatly lays out the contours of the bush election strategy: the tax-cutter, the strong proponent of the military and homeland security and a “compassionate conservative” on selective issues like education. [Sounds OK to me.]

The formula for a general election is simple: Secure your base so you can reach out to the now dwindling number of swing voters. The 2005 budget will energize the base – of both parties – and set the table for the debate for the middle.

“This budget foreshadows the major national debate in 2004 and the differences between the two parties,” suggests Republican pollster Bill McInturff; few of his Democratic counterparts disagree.

When this debate occurs the most disingenuous claim will be to decry runaway federal spending [he must mean “deny”, as “decry” means “condemnation”]. The single biggest cause of skyrocketing deficits is the Bush tax cuts [absolutely not, the tax cuts represent only about 2.5% of the federal budget. Expansion of government programs – the 97.5%-- surely is the main cause of the deficits.] As a percentage of the economy, federal revenues today are lower than anytime since 1950 [Are low tax rates a bad thing? In any event federal revenue collections under Bush (17.0%) is not all that different from the average revenue from 1946 to 2002 (17.9%).]

The deficit forecast probably is too high; the administration later this election year can suddenly claim progress. But the pledge to cut the deficit in half by 2009 is even phonier. That’s conceivable if the Bush, or another, administration accepts a whopping tax hike on the middle class; [It’s never been “whopping” on the middle class, which I assume he equates with the so called “working class”.] this budget assumes no action after this year on the alternative minimum tax. Or if the war on terrorism ends after this year; [no way it will end this year – why even speculate that it might.] There’s nothing budgeted beyond 2004. Or if draconian (liberals seem to love this word) cuts in education and other popular domestic programs are enacted after the November election. [The federal government does not fund education, it’s the states. Besides, education has always been a core value of Bush; so to criticize Bush on what the author falsely believes he might do is a perverted sort of political criticism.] There are gimmicks galore; a $65 billion health-care tax credit will be offset by other savings; none are specified. [Haven’t read about this. The health-care tax credit may have merit, but there is no way of evaluating what he means by “offset by other savings.”]

More likely, the 2009 deficit will be closer to $500 billion than $237 billion. [Probably correct.] Moreover, after that the picture worsens as the baby boomers start retiring. [As the Democrats are fond of saying, “It’s the economy, stupid” – policies that determine whether our economy flourishes or sinks will determine what will be our deficit in 2009.]

The president’s priority obviously is tax cuts, disproportionately for the wealthy. [The wealthy disproportionately pay taxes – the top 25% of taxpayers pay over 84% of all federal taxes. The bottom 50% of taxpayers pay 3.9%. Any increase or cut in taxes inevitably will disproportionately affect the wealthy. These assertions, claims given without facts, are really irritating.] These come at a price. There are budget cuts proposed for this year in low-income housing and environmental programs among others [Such cuts could be desirable or undesirable, depending on the evidence – but the author appears to believe that any cut in any such program is automatically undesirable. The president supports the Results Act (passed by Congress during the Clinton administration) which requires federal departments to assess the performance of their programs. Congress thereby can better decide if the program justifies refunding, increased or modified. The president has also installed a management system that enhances the effectiveness of the Results Act.]

Important investments are brushed aside, the National Institutes of Health – the gold standard of medical research in the world – has flourished as its budget doubled over the last five years. President Bush proposes to end the priority for this medical research, with no increase in real spending this year and subsequent reductions. [Is it not possible that this is an appropriate decision, especially considering its budget “doubled in the last five years.”]? Funds for the Centers for Disease control, the envy of the world, would be sliced. [We need to place all this in the context that medical research has largely increased our health costs, and instead of getting healthier Americans are getting fatter and sicker. Therefore, should our priorities be placed in medical research? It is a debatable question.]

And for all the rhetoric about homeland security, funding for the first responders, especially firefighters would be cut. Fire-fighters, Mr. Rove reasons are aligned with Democrats – unless you’re a Republican and your house is burning down. [Again, how could he possibly know how Mr. Rove is reasoning?]

When it comes to sacrifice, the Bush budget considers the rich conscientious objectors, but doesn’t spare others [What kind of nonsense is this?] The authoritative [on what basis? Do they honor facts and evidence?] Center for Budget and Policy Priorities, a liberal research group, calculates that by 2009 funding for domestic discretionary programs, outside of homeland security, will be cut more than 11% from the current level. That’s education, law enforcement, national parks and firefighters. [How could they possibly know? Congress proposes budgets. We don’t know what party will be predominant during these years. The budgets for such programs have historically risen. On what basis would they conclude that they will drop? It ludicrous to presumptuously make such predictions.] …

This leads to an inescapable conclusion: the Bush White House considers tax cuts more sacrosanct than Social Security or Medicare. [Once again, how could he possibly know what Bush “considers”. We all know that Bush believed that the tax cuts would be good for the economy. And what has, in fact, happened to the economy. Consider these facts:
The Bush tax cut reduced 6 million low-income individuals to zero taxes. The economy grew by over 5% in 2003. Productivity also rose by over 5%. And jobs, a “lagging indicator” is beginning to increase. These are facts related to the tax cut. The issues of Social Security and Medicare are separate issues, of which the American public needs enlightenment, not continuous and unfounded accusations about what Republicans believe.]

[Enough is enough. I can read no further]




Here Are the Facts
By Martin Feldstein
Wall Street Journal, February 12, 2004

Martin Feldstein was chairman of the Council of Economic Advisers under President Reagan, and now an economics professor at Harvard. Dr. Feldstein is an eminent example of a writer of the highest credentials and experience. He condenses enormous amounts of conceptual material into amazing brevity. One does not casually read his material and expect to understand it. In fact, no matter how skillfully one reads him we cannot possibly expect to understand all of the implications of his material. One may even need to refer to other reference material on certain of his points. Yet, reflecting on his writing is always an edifying experience.

“President Bush’s budget for 2005 has unleashed a widespread debate about the effects of budget deficits and the appropriate policy response to the current deficit projection. [Unleashed mostly unfounded opinion. Assume that is why he titled this article ‘Here Are the Facts’ – to attempt to get the debate to re-center on facts and evidence and away from slogans.]

Although fiscal deficits impose a burden on future generations, it would be wrong to respond now with a tax increase. [That’s a plain as you can get. Now how will he use facts, evidence and argument to prove this very critical point in the economic debate.]? Raising tax rates would hurt the expansion and weaken the incentives that drive long-term growth. [He supports the two key points of the president’s economic objectives for tax reductions, (1) to stimulate expansion of the economy and thereby increase both jobs, personal income and government revenue, and (2) influence incentives of consumers and businesspeople through such mechanisms as changes in dividend taxation. If opponents of this position are to recommend reversing the tax reductions they will, to engage in a valid debate, have to prove that a tax reduction doesn’t do these two things.]

Rescinding the Bush tax cuts on high-income individuals would not only be economically counterproductive but would also have little effect on future budget deficits. [Give me a statistic on how little the effect would be.] A 15%increase in the taxes of those with incomes over $200,000 [The Kerry plan --above this I suppose families are considered rich] (e.g., taking the 35% top rate back to 40%) would reduce future budget deficits by a mere three-tenths of 1% of GDP aside from the adverse effect on long-term growth. [Translates as 0.3% of GDP, whereas the current deficit is about 4.5% of GDP, or a reduction of the deficit by 6.7%, which may be a more intelligible statistic. In any event, 6.7% reduction cannot possibly have a substantive effect on dealing with the deficit problem, so the Democratic mantra of increasing taxes only on the rich is meaningless demagoguery. Additionally, the new federal programs the presidential candidates promise to install will run into hundreds of billions, far outstripping the 6.7% in increasing the deficit. This one statistic, if correctly understood completely shatters the Democrats position.]

The medium goal for U.S. fiscal policy should, at a minimum, be a constant or declining ratio of debt to GDP. [He is emphasizing that the absolute size of the deficit doesn’t matter, only its size relative to GNP, so that if GNP rises considerably through economic expansion, that will solve the deficit problem.] Achieving that goal requires bringing the deficit down to about 2.5% of GDP, or less [about the historical average, compared to the 2004 projected deficit of 4.5%, or $450 billion] Recent analysis by the Congressional Budget Office [no pansy of the president] indicates that there is ample time to decide whether more is needed to achieve this than tight controls on spending. [The federal budget at $2.2 trillion, representing government spending, vastly dwarfs the $165 billion Bush tax cut (l.5% of GDP)]

The low interest rates on long-term bonds also show that the participants in financial markets have confidence that future deficits will be coming down. [He’s saying that those who handle big bucks trust the Bush plan.]

Persistent budget deficits are harmful because they absorb funds that would otherwise be available for private investment in plant and equipment, an important source of economic growth. [The majority of the financing of the deficit is from the same national and international investors that finance our growth. They must trust the Bush strategy or we are in trouble.] Although some of this crowding out of private investment is offset by an inflow of capital from abroad experience shows that large capital inflows eventually decline as foreign investors become concerned about their international exposure. [There, he said it. I suppose that’s the danger when the deficit remains above 2.5% of GNP. Therefore, it must be vital to have a believable plan to reduce the deficit over a 5 or 10-year period.]

Budget deficits impose a further burden on future taxpayers because the resulting increase in interest payments means higher future taxes. [which presumably will automatically occur in an expanding economy.] The projected 2004 budget deficit of 4.2% of GDP [his estimate is lower than the 4.5% I’ve been seeing.] will raise the national debt by that amount. Although some of the future interest payments could be financed by further borrowing rather than by raising taxes, this option is limited by the need to prevent an explosive rise in the debt-to-GDP ratio [now about 36%, about the historical average, and projections show its rise to 37% in about 5 years.] That would occur if borrowing alone were used to pay future interest costs. Borrowing only postpones the time when taxes have to be paid. [i.e. the economic strategy must be to grow the economy to where tax revenue can pay back some debt, and the administration and Congress impose on themselves budget restraints – now seemingly insufficient.]

Whenever financial investors become concerned that future budget deficits will continue to rise, long-term interest rates increase and do so very substantially. In 1984 when the fiscal deficit was 4.8% [Reagan time] of GDP and expected to remain high or go higher, the interest rate on 10-year U.S. Treasury bond was a remarkable 12.4% [ouch]. Net of the 3.9% inflation rate, the real rate on those bonds was an extremely high 8.5%. [Of course, one must deduct inflation to get real rates.] Today the 10-year Treasury bond yield is only 4%, the lowest level in 40 years. The real yield on 10-year Treasury inflation protected securities (TIPS) [didn’t know there was such a thing.] is only 1.8%. All of this implies that the financial markets have substantial confidence that future deficits will decline relative to GDP. [What an astounding difference from the confidence of the average voter, as negatively generated by the political hyperbole of the Democrats. One would hope integrity would induce politicians to try to honestly inform the voters – but I suppose that is too much to expect. Well, that’s the purpose of my book; instruct the voter sufficiently that he/she can cut through the crap.]

The CBO’s recent analysis of the fiscal outlook provides evidence that supports the financial market’s confidence. Although the CBO’s baseline projections assume no change in current law (implying, for example, that the Bush tax cuts will expire after 2010), the CBO report provides the building blocks for realistic projections. [Hope he explains this.] These estimates imply that even if all of the personal tax cuts are extended, a major reform of the alternative Minimum Tax is enacted to remove most middle-income taxpayers from the AMT, and discretionary spending keeps pace with inflation [Lord, protect us from the spenders.], the fiscal deficit will decline from 4.2% of GDP in 2004 to 2.7% in 2009 and 2.6% in 2014. [Not if any of the Democratic candidates for President win and are successful in enacting their new program proposals, and not if the terrorists succeed in destroying our airline or some other major industry.] Such is the power of moderate growth and a tight control on discretionary spending. [This is difficult to see clearly – the power of moderate growth – on resolving deficit and federal debt problems. Must play with the statistics some more to see this better, as this is the vital dynamic to understanding and justifying mechanisms, such as tax cuts and tax-change incentives, in influencing the economy to grow a bit faster. It is also important to observe these incentives at a micro-economic level, such as the psychology of risk.]

[I wonder why it is so difficult for voters to grasp our extreme vulnerability to the terrorists, and economic damage they can incur. Grasp of the terrorist problem, and the need for an aggressive offensive anti-terrorist strategy has enormous relevance to our economy. This ignorance frustrates me almost beyond my tolerance.]

Long-term budget projections are of course subject to substantial uncertainty. The projection that the deficit will decline to 2.6% in 2014 may be too optimistic or too pessimistic. No one in 1995 expected that the 1995 deficit of 2.2 of GDP would change over the next five years to a surplus of 2.4% of GDP. That happened because the large rise in the productivity growth rate after 1995 produced surprisingly strong GDP growth and much more tax revenue than forecasters had anticipated. President Clinton refused to cut tax rates to give that money back to taxpayers while the Republicans in Congress limited any new spending initiatives. The result was a budget surplus. [But much of that economy was a bubble, unfounded optimism, soon to be shattered.]

Looking ahead, one reason why actual budget deficits may be smaller than those implied by the CBO analysis is that the CBO bases its calculation on a projected GDP growth rate of only 2.8%. [Now that is something to remember, as the new technologies are almost certain to keep growth at 3 to 5%. This rapid GNP growth has already had a marked effect on government revenue growth – such that despite the Bush tax cut the increase in revenue growth from 2003 to 2004 is projected to be 2.7%, compared to the historical average of 2.9%. This ought to be an important statistic in the political debates. Also, the Bush proposed 2005 federal budget is 19.7% against a historical average of 19.5%]

The improved productivity after 1995 has caused average GDP growth 3.4% since then despite the recession [so he agrees with me, and the non-recessionary period is likely to pull it toward 4%. I think the average over the past 40 years, or so, is about 2.4%] Continued growth at that rate for the next decade would reduce the fiscal deficit in 2014 from the projected 2.6% of GDP to just 0.9% of GDP. [There are huge risks in terrorism, major new spending programs in health, social security, and education that could seriously damage economic growth and government non-discretionary spending. Wonder how Feldstein looks at these risks.]

Conversely, budget deficits could be significantly higher than this if real discretionary spending on defense and non-defense programs grows rapidly. [He is explaining] Raising the growth rate of discretionary spending from the rate of inflation to the rate of growth of nominal GDP [what is ‘”nominal GDP?] Would increase the 2014 deficit by 2.4% of GDP, increasing the 0.9% of GDP potential deficit to 3.3%. [Wow, shows what lack of restraint on government spending to do to economic growth and deficits. Oddly, the Democrats, and I suppose some Republicans; call these expenditures “investments”. A deceptive term, eh?]

How is discretionary spending likely to evolve? The bug increases in budget authority during the Bush administration have been in defense and homeland security, rising from 3.3% of GDP in 2001 to 4.3% in 2004 (including all of the supplemental appropriations.) [Interesting, about the same as the deficit.] Although this represents a real dollar increase of about 12% per year, the 4.3% of GDP earmarked for defense is still much less than the 5.8% of GDP spent on defense in the ‘80s [Reagan and cold war days] or the 8.8% of GDP in the ‘60s [Vietnam war]. Going forward, the end of the afghan and Iraq conflicts and the defense transformation planned by the Pentagon should permit limiting future defense outlays. [I assume he is referring to mass reaction troops to quick reaction, high tech troops, a change led by Secy. Rumsfeld.]

Contrary to the complaints of the many who criticize the bush administration for favoring a continued rapid growth of domestic programs, the administration ahs actually been quite tough in controlling the budget authority for discretionary spending outside defense and homeland security. [Reassuring to hear that. But the inclusion of pharmaceuticals in Medicare still has me worried.] These limits on new appropriations will restrain spending growth in the year ahead. But the actual outlays of the past few years increased more rapidly than concurrent appropriations because of the delayed effects of the appropriations passed during the Clinton years. [Now that a new one for me. Will he cover this?]

Here are the facts. The appropriations for discretionary spending outside defense and homeland security rose 16% in the final Clinton budget [astounding – his last year – like leaving behind a mine field.] Propelling future spending on these programs. The Bush administration reduced the growth of these appropriations to 9.2% in 2002 and then to 2.7% in 2003 and 2004. [That’s a much better performance of the president than even I, a conservative, imagined. Makes my day and gives me hope.] As a result, such appropriations fell from 3.5% of GDP in the first Bush budget to 3.3% in 2004 9including all supplemental appropriations.0. The president’s latest budget proposes to keep the 2004-dollar amount unchanged in 2005, implying a decline to less than 3.2% of GDP. [So much for the claims of fiscal irresponsibility of Bush.]

Despite these tight controls on appropriations, the earlier appropriations caused actual outlays to rise 12.3% in 2002 and kept their growth at 5.8% in 2004. This long-term effect of past appropriations shows that bringing spending under control requires the passage of time as well as tough budget choices. [Perhaps we can see this at a micro-economic level when we consider that a decision to finance another aircraft carrier under one president may be finished 5-10 years later under another.]

Shrinking the deficit to a level at which the debt is no longer rising faster than GDP will require tight spending controls or GDP growth at a faster pace than in the past 10 years. [Achievable, except for the unknowns of terrorism.] There is no reason to consider a tax increase at this time. The big budget challenges for the years ahead are to continue the tough controls on discretionary domestic appropriations, to use the defense transformation to limit the budget outlays for national security, and to start the reforms of Social security and Medicare that will be needed to avoid a budgetary explosion when the baby boom generation begins to collect retiree benefits. [Great article. Think I’ll look up more by him in the Web.]

[To really master this article one needs to reflect on the key points and important statistics for about half an hour – writing them out.]

Recovery or Catastrophe?
Where is the US Economy Heading?
December 20, 2003
By the Workers Action (US)

We should include at least one really bad article. This is one qualifies. The author, apparently a liberal extremist, does include facts and statistics. He does present evidence, though not knowing what they imply. He presents arguments, though based on misinterpretation of his facts. See for yourself, and I promise not to burden you with the full article, as it would damage your neurons. Nevertheless, it is worth reading because much of it is repeated in the political arena. Since there are many who believe this nonsense we have to find a way to combat it.

“Despite one of the worst slow downs in U.S. history [actually it was one of the least, with only about two quarters of no growth], the government’s economic statistics for the Third quarter, November 25, 2003) painted a rosy picture [a date in the third quarter is not the third quarter]. Economic growth soared ahead at 8.2% [correct]. Orders in non-defense goods rose 1.7% last month on top of 5.8% in September [both correct statistics]. New orders for costly long-lasting goods climbed 3.3% -- exceeding the Wall Street economists’ forecasts of only 0.8% [again correct statistics, I think]. According to the National Association of Purchasing Management of Chicago, business activity in the Midwestern U.S. surged to 64.1 from 55 in October 2003 [What the heck do these statistics mean. Such esoteric statistics require an interpretation.] Even the official unemployment rate dropped from 6% to 5.9%.” [He doesn’t say when it was 6%, so to compare it with 5.9% is to trivialize the drop. Actually I think the high point was 6.3% in June 2003, and most recently in January 2004 it was down to about 5.6%].

”Is a sustainable recovery finally underway after the longest period of continuing job loss in U.S. history? [He seems to love hyperbole, as the job losses occurred over a period of about 2 years, nothing compared to the many depressions throughout U.S. history. Actually the historic average unemployment over the past 40 years is about 5.7%, so the present unemployment is now about average. Hardly a disaster, considering one of its primary causes is the outstanding improvement in productivity over the past two years, and including the last years of the Clinton administration.] Have we avoided another economic crash? Is this a sign of economic strength or tightening of explosive contradictions?” [I have no idea what he is saying, other than the sentence appears to have internal contradictions.]

The Situation with Jobs
“Where are workers getting jobs? According to the Economist, workers are being forced to attempt to start small businesses to make ends meet: In any case, the government reported that the number of self-employed workers rose by 156,000 last month, to 9.2 million. That gain was a primary reason that the unemployment dropped to 5.9 per cent.” (Grasping at the Statistics on the Self-Employed, December 6, 2003).” [I assume the parenthetical information is to convey that that was a quote from the Economist. Is entrepreneurial action and taking responsibility for ones gainful employment a bad thing? We are a nation of entrepreneurs. I did the same myself, and its worked quite well. We are not well served as a nation if we think dependency on employment by others is the only way.]

“The lower number of unemployed is largely the result of workers, unable to find steady jobs, setting up their own small businesses with less money, no benefits, and no security. [I lived half my life in this condition. Its tough, but nobody owed me a damn thing, least of all, the government – which means other peoples tax money. It never once occurred to me that it was anybody’s responsibility other than my own.] Likewise, reflecting this process, the manufacturing sector shed 17,000 employees, while temporary workers grew by 20,800 in November, an increase over the normal average of 15,000 from July through October. Again these are jobs that provide less money, no benefits, and not even the pretense of security. [I wonder if he’d rather have stayed in the womb.] The rise in the self-employed and temporary workers shows a trend toward the ruin and pauperization of the working class.

[Many of those in temporary work choose it for a lifestyle, and some are mothers who wish to spend more time with their kids. I have daughters in this category. Most have husbands or wives who have the medical insurance and more substantial incomes. The reason that manufacturing jobs have been going down is that manufacturing is the arena of greatest productivity improvement. The statistics are something like this: Manufacturing is producing about 50% more than in 1975, but needing only about 30% as many workers. I’m not sure of exact dates or the percentages, but the proportions are about right. Such productivity improvements are the reason our standard of living has been going up steadily over the decades – actually, there is no other way of improving our standard of living. Productivity improvement simply says, “We produce more with less”. Anyone who thinks that is a bad thing should return to the first grade, or just admit they have lost the power of rational thought.]

[Furthermore, “pauperization” and “working class” are slogans without meaning. The average total compensation of manufacturing employees has continued to rise over the past century, including recently (up 28% over the past 20 years.). Who are the “working class”? They never identify them. The hardest workers I’ve ever known were entrepreneurs and professionals, such as doctors, dentists, architects, attorneys and high level managers. But I can’t imagine that’s what they mean by “working class”. Presumably it’s meant to describe a group that sweats (like $10 million dollar basketball players?), or get dirty, like small farmers.]

“With the 8.2 percent growth, forecasters expected at least 140,000 more non-farm
Payrolls. [He must mean “on payrolls”, and when was this expected – I think January, 2004.] Instead, the increase was only 57,000. Wall Street Diary, December 6, 2003). [I think he means “according to the Wall Street Daily …] The bosses increased investment in production isn’t resulting in jobs. Instead, they are putting much of their capital into job killing automation. [His term “automation” must mean the whole range of productivity improving systems, of which automation is a small part. In any event such investments accounts for virtually all of the improvement in our standard of living over the past several centuries. Improvement in productivity means fewer employees can produce the same or more – which means less labor costs, and often less materials cost, usually with improvements in quality as well. So we get lower cost, and better, products for consumers, thus expanding our market. As the market expands (increasing demand), supply must increase, requiring more workers. And so has gone the history of the American job-creating machine. It’s apparent the author understands none of this.]

“As a result, record numbers have been exhausting their unemployment benefits. An unknown number of these drop out of sight of the bean counters or are meaninglessly shifted into another category such as “self-employed.” Regardless of the deliberate undercounting, the long-term unemployed grew to 23.7 of the total unemployed figures. This is the highest it has been since 1983. [In my dad’s days there were no unemployment benefits, so he had to work. Every newspaper I’ve ever seen has many jobs available. Rather than “undercounting” unemployment figures are typically over counted. There are two ways of counting, (1) calling businesses, and (2) calling homes. The business count is usually the one reported, but it reports higher unemployment because some who leave the business create self-employment. The difference in the count is over 100,000 per month.]

“Compounding this situation, every month 140,000 people on average enter the labor force, in part, because of growing population. This means that job growth has to run to standstill. [I think he means, “has to exceed this amount to prevent growth in unemployment. This is true.]
…
“For those workers who do have jobs, not only are they being paid less, but worked harder. Output per worker, per hour grew at an annual pace of 9.4% in the Third Quarter, the fastest rate in 20 years. The boss’s investment in production isn’t resulting in more jobs, but in forcing their wages slaves to work like dogs. [It is extremely rare that working harder is the reason that output per worker increases. Predominantly it is because of investment in better plants and facilities, systems changes, automation, and employee training. “Forcing”, “wage slaves”, “work like dogs.” Amazing perception.]

[The author’s statements get wilder from here on, so I won’t try your patience.]