Tuesday, November 24, 2009

Don't sweat it

When I taught a graduate class on America's social movements at the New School University during the 1990s, one question I often received from students was why there seemed to be so little student activism around the country. Why had all the 'sixties movements died out?

One answer, of course, was that many of the goals of the earlier movements had been reached--partially, to be sure--especially concerning civil rights and feminism. But the more important answer was that student activism was indeed alive and well on campuses, if not quite on the scale that it had been. Students were, and are, actively involved in, among other things, gay rights, environmentalism, food cooperatives, and efforts to end the disgrace of sweatshops.

Just how active, and how successful, was seen recently with the report that Russell Athletic, a major supplier of clothing for sports teams and universities, had agreed to rehire all 1200 workers in its Honduras plant, which Russell had shut down after the employees unionized.

Russell's decision came about only after months of picketing and demands by United Students Against Sweatshops that their colleges and universities sever commercial relationships with the company. The schools agreed, and Russell capitulated. An astounding victory.

But there's another point to be made regarding this episode. Some observers are now saying that sweatshops, as debilitating as they are, are better than nothing, so stop fighting them. Nicholas Kristof of the New York Times, who has done more to alert readers to crimes against women and children throughout the world than just about any other mainstream journalist or columnist, is among those who support sweatshops. His argument is that, although bad, "sweatshops are only a symptom of poverty, not a cause, and banning them closes off one route out of poverty." He has recently reaffirmed his position: "Americans are horrified by sweatshops, but nothing would help Liberia more than if China moved some of its sweatshops there, so that Liberians could make sandals and T-shirts."

Predictably, his justification has generated much outrage. Sabina Dawan at the Center for American Progress Action Fund, for example, replied that "The notion that taking advantage of a person’s desperation for economic gain is somehow morally defensible is preposterous." Alleviating poverty, in other words, does not require expansion of the dead-end horrors of sweat shops. Alternative strategies exist, she noted, such as those of The International Labor Organization’s Decent Work Agenda, "which focuses on the creation of decent employment, alongside social dialogue, social protection and fundamental principles and rights at work...."

And Josh Eidelson noted on his blog that while some argue that sweatshops in the United States were the springboard to a middle class existence for thousands of Americans, it was not the sweatshops themselves, but sustained organized opposition to them, largely through unions, that enabled the workers to realize their dreams.

The victory of United Students Against Sweatshops has demonstrated beyond question that the anti-sweatshop movement is the way to go.

Friday, November 20, 2009

Slow down...if you can

Ever feel that the holy grail of journalism--scooping the competition--is more destructive than helpful? That it would be great if this particular form of the rat race were put to rest? That the need to be firstest with the mostest undermines serious, careful digging and analysis, as well as depriving yourself of a major source of information, namely readers?

If you have, you're not alone. I just came across a concept known as "slow journalism" on the Campfire Journalism blogsite. It's difficult to define precisely, but its tenets, according to the blog, include the following:

"Gives up the fetish of beating the competition. Values accuracy, quality, and context, not just being fast and first. Avoids celebrity, sensation, and events covered by a herd of reporters. Takes time to find things out. Seeks out untold stories. Relies on the power of narrative. Sees the audience as collaborators."

Of course, if your editor, or client, has set a tight deadline, you have very little wiggle room. Still, slow journalism is a concept that deserves a lot more consideration.

Monday, November 16, 2009

Gimme shelter

The recent decision of Pfizer, the $48-billion-dollar drug company, to reneg on its promise to build a new research division in New London, Connecticut and instead relocate elsewhere (taking some fourteen hundred jobs with it), is part of a scenario that has sent spasms of rage among conservatives and libertarians. Not that the rightists question the privilege of a corporation to do whatever it pleases--since corporate self-interest, along with absolute property rights--is at the very core of their ideology. Nor that they likely care the city will lose all those jobs.

Rather, their ire derives from the fact that Pfizer's offer to New London was predicated on the government seizing private property for the proposed research structure through the process of eminent domain, which is usually employed to meet some urgent public need (road safety, a water line route, a hospital, etc.). To the economic right, public need is virtually non-existent; private property is sacrosanct; therefore government seizure is the very essence of evil.

As a consequence of the seizure, several people lost their homes. So I find myself in a once-in-a-lifetime agreement with the right wingers, but for the opposite reason. I have never considered property ownership inviolable--and I say this as a small property owner myself, as well as a renter. To me, it is the right to affordable shelter--a very pressing public need--whether through owning your own home or renting it, that is, or should be, beyond question. My opposition, then, is that the Pfizer scenario reflected the dominance of corporate self-interest over public need.

In most cases today, the loss of one's shelter is a function not of an independent government's "interference" in the market economy, but of dominant private interests--capitalists--who, acting in their own self-interest, exercise undue influence to get government to do their bidding. As clich├ęd as it sounds, it is the private sector behemoths that pull the strings under which government officials act.

Think of the innumerable gentrification battles in New York City, Boston and other municipalities between gargantuan landowners and beseiged residents, mostly tenants but also small shop keepers. Think of every instance in which large landlords seek to evict tenants clinging to the few government protections they have, in order to make room for higher paying tenants. (In most of New York City's Manhattan neighborhoods today, a one-bedroom apartment typically rents for around $3,000 a month!)

As one who has fought for years against the dislocation of residents--tenants and small businesses--before the onslaught of corporate expansion and landlord greed, I have experienced time and again how large private sector interests dominate the urban economy, making life precarious for all but the very wealthy. In these battles, the government may be the public face of the "enemy." Behind the scenes, however, it is always the giant private interests--large real estate developers, landlords, highway promoters, universities (which are non-profit, but in name only) and others, that are the key actors. Funding them, of course, are banks and other private financial entities.

Therefore, it seems to me that the New London City's action, rather than consitituting an assault on private enterprise, was business as usual in a capitalist economy. You don't have to agree fully with Karl Marx, who (at least according to Leon Trotsky) regarded government, or "the state," as little more than an "executive committee of the ruling class." But he did have a point. Because while such a formulation may appear simplistic today, the New London/Pfizer case seems to typify that very government-corporate relationship. Pfizer made known its desire; the city government jumped to do its bidding; and people lost their shelter, all for a pie-in-the-sky promise of economic development that never took place.

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Wednesday, November 11, 2009

Estimates and projections

All the financial writers on your publication's staff have been laid off, so your editor wants you--with your zero experience in financial reporting--to prepare a story about the direction of key economic indicators over the next two years. The focus will be on corporate profits nationwide, and it is your task to come up with some reasonable estimate of how profits will fare.

And no, your article may not consist merely of dueling quotes, as New York Times columnist Paul Krugman describes them, from economists with opposing views. You have to generate your own estimate, and then, perhaps, vet it with the views of experts.

Chill. First thing to keep in mind is that estimates--or in this case projections--are notoriously shaky things. The most solidly grounded projections can be upended by unforseen events: an unexpected war (think Iraq); the vaporizing of a bubble (housing, the dot.com debacle); implosion of some of the country's leading financial institutions (Bear Sterns, Lehman Bros.); a devastating earthquake.

But however common such cataclysmic events are today, you cannot approach your story with the view that they will always take place. You have to assume that the nation's economy does contain some degree of stabilization, without which no estimates, let alone projections, can be attempted.

So here's how to attempt it: We assume that corporate profits have a certain ratio (relationship) to Gross Domestic Product. Therefore,

1) Get an official listing of corporate profits over the past few years.
2) Get an official listing of GDP over the past few years
3) Get an official projection of GDP over the next few years.
4) Divide existing profits by existing GDP over the past few years. This gives you recent annual percentages--your ratios, in other words.
5) Now note if these percentages follow a slight pattern. For example, do they decline each year? Increase each year? Go up and down?

All this is easier than it sounds. Let's start with steps one and two. Both recent corporate profits and recent GDP figures are available from the Commerce Department's Bureau of Economic Analysis. Click on this site, and go to Table 11. On the top line, you'll see that corporate profits for the past three years were:

2006: $1,608.3 billion (or more than one and a half trillion dollars).
2007: $1,541.7 billion.
2008: $1,360.4 billion.

In other words, recent profits in general (as of this posting) have declined over the past three years. No surprise there, given our deep recession. (Ignore the fact that some companies made out like bandits during the same time period.)

Now go to Table 9. You'll see that GDP was:

2006: $13,398 billion.
2007: $14,077.6 billion.
2008: $14,441.4 billion.

GDP rose slightly. (If only jobs and wages rose along with it! But stop digressing.)

Now divide each year's profits by that year's GDP. Use a calculator, or better still, a spreadsheet program like Excel. Here's what you'll find: In 2006, profits were twelve percent of GDP. In 2007, they were eleven percent. And in 2008, they were 9.4 percent.

In other words, recent profits appear to follow a slight downward pattern in relation to GDP, dropping by one to two percent of GDP each year.

You're almost done. Now you need to apply this pattern to the GDP projections, which you can get from the Congressional Budget Office. The top line of this report shows that the CBO projects GDP for 2009 at $14,163 billion; and for 2010 at $14,570 billion.

So take, say, 8.5 percent of the 2009 amount. Why? Well, it follows the pattern: it's nearly a point below the 2008 figure. (You can tinker with this percentage a bit, after you talk to an economist or two.) So you get $1,203.85 billion projected profits for 2009.

Now take, say, 7.2 percent of the 2010 GDP figure: you get $1,049.04 billion projected profits for 2010.

You now have your own projections. Are they accurate? Well, many factors affect profits, of course, and anything can happen to disrupt the pattern. But other things being equal, these projections are, indeed, reasonable assumptions.


Thursday, November 5, 2009

Jobs: public transit vs. highways

With official unemployment in the United States above ten percent (considerably higher when counting underemployment and workers who have given up looking for jobs), it is good to see President Obama calling for massive investments in public energy improvements. But his recent praise of Dwight D. Eisenhower's 1950s-era promotion of the Interstate Highway System, as reported in a recent Bob Herbert column, was off the mark, especially since his speech was made before a startup solar energy company that says it will save tons of greenhouse gas emissions "which is equivalent to removing 4,500 cars from the road each year for the life of the project."

The irony here is that those 4,500 cars--and millions of others polluting our air year after year--owe much of their presence to the very same interstate highway system that Eisenhower championed. There is no question that highways, long touted as a solution to unclogging urban areas, in fact accomplish precisely the opposite, generating enormous sales of automobiles, as consumers seek to take advantage of more rapid car traveling. More highways mean more cars, not fewer.

This was noted decades ago. As one critic (Helen Leavitt, Superhighway Superhoax) wrote in 1970: "Our great urban centers have been subject to the busy concrete mixers and asphalt rollers in the guise of progress, where the ribbons of highway they create are further strangling automobile traffic, adding to the already dangerous air pollution levels and displacing the city's residents with still more cars while transportation daily becomes more difficult."

Who primarily benefits from the Interstate Highway System? As Leavitt noted, after Eisenhower made his proposal, "Capitol Hill was flooded with lobbyists representing contractors, oil, auto, real estate, trucking and concrete interests, all bent on establishing the biggest pork barrel legislation in the history of the United States."

Certainly, highway construction creates jobs. But jobs can be created by other undertakings, such as massive investments in public transportation. Thousands of employees are needed to build public rail systems; additional thousands of permanent jobs can be created to operate them, to maintain them, and not least to devise new technology for ongoing improvement.

Given the prevalence of the automobile in this country, and the fact that we take superhighways for granted, it is difficult to imagine what life in both urban and rural areas would be like if, instead of all the highways, we had efficient, safe, clean public transit, transporting thousands of people daily in comfortable high speed trains or other cleaner-energy "people movers." Difficult, but not impossible.

Think of fewer cars clogging our streets. Fewer accidents--yes, while highways are generally safer than unmended roads, fewer cars necessarily mean fewer crashes, and less road rage.

And try to think of the affordable housing that would not have been lost to highway expansion. And the rural areas that would have remained bucolic. And the large urban areas that would not strangle themselves on endless traffic jams and greenhouse emissions. In fact, when the occasional highway is removed, as the Preservation Institute notes, life becomes far more pleasant.

Jobs? Obama, and Herbert as well, are right to stress the central importance of job creation today. But we can do that without glorifying a boondoggle that has worsened our quality of life.

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