Archive for 2008

08w16:1 Marni Soupcoff’s Provocation

by timothy. 0 Comments

Canada’s biggest mistake: The $7.5-billion that Canadian governments lavish on the arts every year | Marni Soupcoff
http://goodreads.timothycomeau.com/shorty/nationalpost/funding/

National Post says: Cut Government Arts Funding | View on Canadian Art
http://goodreads.timothycomeau.com/shorty/viewoncanadianart/funding/
(Linked to for Comment thread)

Marni Soupcoff’s Provocation | Timothy Comeau
http://timothycomeau.com/blog/617/

08w14:4 The Shameful Minimum Wage

by timothy. 3 Comments

Honestly, if a business can’t afford to pay all its employees a livable wage, than that business should be considered a fail. What are businesses for? (The wrong answer is to say the enrichment of the owners at the expense of the employees, because that’s like Marxism or something, and we’re supposed to be past all that).

I remember when I was working for a minimum wage in Halifax, feeling both totally exploited and humiliated into enforced poverty. Further, the business had like 6 people on the payroll when it only really needed three. That’s where I got the idea that mismanagement should never be an excuse to pay people peanuts. And why I have no sympathy for the business owners who claim raising the minimum wage would be too hard on them. They’re not paying themselves a minimum wage are they?

My greater concern for raising the minimum wage is this society’s capacity to maintain an unfair status quo. As is pointed out in this article, adjusted for inflation, today’s Ontario minimum wage is equivalent to what it was thirteen years ago. I’ve noticed in the past that whenever the minimum wage goes up, so do the prices at Tim Hortons, (which I consider to be an unofficial index of inflation). So the gains of the working poor are immediately offset to erase them. The article begins by pointing out that the Ontario minimum wage went up last week. This week Tim Hortons had signs at its counters saying the prices of some menu items would rise next week. Two weeks ago, the Go Train commuter system rose its ticket prices too.

So, in 2010, when the minimum wage rises to $10 and hour, count on 1.60 coffees (rather than the current 1.42 lg) at your national coffee chain, and corresponding ticket prices across our belle province and sun-shiny country. – Timothy

Wage Ain’t Nothing But A Number | Jaime Woo
http://torontoist.com/2008/04/wage_aint_nothi.php
“Last week, minimum wage was raised to $8.75 an hour in the first of three scheduled increases. According to the arguments provided in the media (and on Torontoist), an increased minimum wage is necessary to help people make ends meet, but could force businesses to cut jobs to accommodate the increased costs. From a numbers point of view, the raise was a necessary antidote to the minimum wage being frozen at $6.85 from 1995 to 2003. Using the Consumer Price Index for Toronto, $8.75 adjusted for inflation ends up being $6.85 in 1995 dollars. Businesses caught off-guard by this year’s minimum wage increase must be pretty naïve to not realize that, after eight years of locked minimum wage rates, a correction was coming. However, each increase (or decrease) of the minimum wage by the government must be justified as the costs come off the back of the employers.”

08w14:3 The Superclass

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The rise of the superclass | Laura Miller
http://www.salon.com/books/review/2008/03/14/superclass/
“‘Davos man’ is an epithet coined by the conservative scholar Samuel Huntington to describe the very specific type that attends the conference. These are people who, as Huntington wrote, ‘have little need for national loyalty, view national boundaries as obstacles that thankfully are vanishing, and see national governments as residues from the past whose only useful function is to facilitate the elite’s global operations.’ […] Rothkopf’s credible, if not especially original argument in ‘Superclass’ is that over the past several decades a ‘global elite’ has emerged whose connections to each other have become more significant than their ties to their home nations and governments. They schmooze regularly at conferences like Davos, go to the same schools, serve together on corporate and nonprofit boards, and above all do business with each other constantly — to the point that they have become a kind of culture in themselves, a ‘class without a country,’ as Rothkopf puts it. Furthermore, these people are ‘the new leadership class for our era.’ […] In the concluding pages of ‘Superclass’ it becomes increasingly difficult to dispel the impression that you have just read what amounts to a 380-page business card. Many recent nonfiction books on ‘current affairs’ are little more than that. Organized around a catchy concept and extensively researched by underlings, they win their authors jobs in think tanks and speaking engagements at corporate workshops and conferences — all of which pay much, much more than anyone can expect to make on a book. There are a handful of important ideas in ‘Superclass,’ it’s true, but many of them have been gleaned from other, more original thinkers. There are also a lot of facts and statistics, presumably gathered by Rothkopf’s assistants.”

08w14:2 Immanuel Wallerstein's Commentary for 1 April 2008

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Immanuel Wallerstein’s Commentary No. 230
http://fbc.binghamton.edu/230en.htm

“Wall Street is Really Predicated on Greed”

It is not I who is saying that Wall Street is really predicated on greed, but Stephen Raphael. And who is Stephen Raphael? He is a former member of the Board of Bear Stearns, the Wall Street bank that collapsed last month. And where did Raphael say this? In an interview with the Wall Street Journal, which is more or less the house journal of Wall Street. And what was Raphael’s point? It was to explain (or was it to excuse?) the collapse of the firm. “This could happen to any firm,” he said.

Yes, indeed it could. And it did. Meanwhile, while this was happening, the chairman of the firm, Jimmy Caynes, was nonchalantly playing bridge in a tournament. Not too smart for a greedy banker. As a result, he lost most of his personal fortune, and another greedy firm, JPMorgan Chase, came in like a vulture and made a killing. Oh, incidentally, some 14,000 employees of Bear Stearns are, or will soon be, out of a job.

Is then capitalism nothing but greed? No, there are other things to it, but greed plays a very big role. And greed, by definition, works for some at the expense of others. So, some firms are going bankrupt these days – on Wall Street, and elsewhere in the world – and others are not. The United States as a country is going bankrupt, and others are not. The United States doesn’t call it that, but that is the truth of it.

Is it always like this? No, not always. Just half the time. Let us review how Wall Street and the United States got into this particular disastrous corner. It all started out well – for Wall Street and for the United States in 1945. The war was over. The war was won. And the United States was the only industrial power whose factories were intact, untouched by wartime damage. There were destroyed cities elsewhere, and actual hunger in Europe and Asia.

The United States was set to do well, and it did do well, very well. It could outproduce the world, and get the rewards. It made a deal with the Soviet Union – we call it rhetorically Yalta – so that there would be no nuclear wars that could really damage the United States. And, at home, the big manufacturers made a deal with the big unions so that there would be no destructive strikes to interfere with the profitable production. Rosy times loomed, and the standard of living went up dramatically. Actually, the years after the war proved to be fairly rosy times for most of the world. It was the moment of the greatest expansion of production, of profit, of population, and yes of general welfare in the history of the capitalist world-economy. The French called it the “thirty glorious years.”

Must all good things come to an end? Well, cyclically, in the five hundred years of the modern world-system, I fear this has always been true. When everyone begins to cash in on economic expansion, the rate of profit has to go down. Profit from production depends on relative monopolization of the leading industries. But if too many countries have steel factories or auto factories (the leading industries of the times), there is too much competition. And, despite all the nonsensical slogans, competition is not good for capitalists. It reduces the profits.

And when profits get hit too hard, the world-system enters into one of its periodic periods of stagnation. This happened circa 1970. And, in case you hadn’t noticed, things have not been rosy since then, despite once again all the nonsensical slogans. What happens in a period of worldwide economic stagnation? The factories begin to move out of the erstwhile locales (like the United States, but also Germany, France, Great Britain, and Japan) to other countries (like South Korea, India, Brazil, and Taiwan) in search of lower costs of production. It seems good for the new places of steel and auto production, but it means layoffs in the old centers of production.

But runaway factories are not the whole story. What do big capitalists do, if they want to make money, in times of lower profits from production? They start to shift their money from productive enterprises to financial enterprises. That is to say, they begin to speculate. And, in a time of speculation, greed knows no limits. So we have junk bonds and takeovers and subprime mortgages and hedge funds and all those curious things with curious names. It seems that even Robert Rubin, one of the really big people in the financial world, admitted recently that he doesn’t know what a “liquidity put” is.

The underlying story – from 1970 on – has been that of debt, greater and greater debt. Corporations borrow, individuals borrow, states borrow. They all live above their real incomes. And, if you’re in a position to borrow (it’s called credit), you can live high on the hog, as they say. But debts have a small downside. At some point, you’re expected to repay debts. If you don’t, there is a “debt crisis” or a “bankruptcy” or, if you’re a country with a currency, a dramatic decline in the exchange rate.

This is what we call a bubble. And if you blow up a balloon long enough, no matter how good it feels, at some point the balloon bursts. It is bursting now. And everyone is frightened, as well they might be. When the bubble really bursts, it is really painful. The thing is, it is usually more painful for some than for others, even if it is painful for everyone.

At the moment, it might turn out to be most painful for the United States – as a country, and for its capitalists, and above all for its ordinary citizens. It seems the United States has been spending not billions of dollars but trillions of dollars on some wars in the Middle East it has been losing. And it seems that even the wealthiest country in the world doesn’t have in its coffers trillions of dollars. So it has borrowed them. And it seems that its credit in 2008 is not as good as it was in 1945. It seems that the creditors are today reluctant to throw good money after bad. It seems that the United States might be going bankrupt, like Bear Stearns.

Will the United States be bought out by China or by Qatar or by Norway, or by a combination of all of them at $2 or even $10 a share? What will happen to those very expensive toys that the United States keeps buying, like military bases in a hundred countries, and those airplanes and ships and superduper guns the United States constantly orders to replace yesterday’s toys? Who will feed the people on the breadlines?

Come back next decade, and let me know.

by Immanuel Wallerstein

[Copyright by Immanuel Wallerstein, distributed by Agence Global. For rights and permissions, including translations and posting to non-commercial sites, and contact: rights@agenceglobal.com, 1.336.686.9002 or 1.336.286.6606. Permission is granted to download, forward electronically, or e-mail to others, provided the essay remains intact and the copyright note is displayed. To contact author, write: immanuel.wallerstein@yale.edu.

These commentaries, published twice monthly, are intended to be reflections on the contemporary world scene, as seen from the perspective not of the immediate headlines but of the long term.]

08w14:1 Gladwell vs Gopnik in Toronto

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Weisblott’s excellent summary convinces me this was eminently missable. Gebu was there, and she said this about it:

Today, e and I went to a debate held by Maclean’s: Canada: Nation or Notion. The argument was more of a semantic variety, but it was a lively conversation between Malcolm Gladwell (Blink, or The Tipping Point) and Adam Gopnik (Paris to the Moon). The problem was that the two speakers had similar backgrounds — expats who are now living in NYC — but the discussion was entertaining. Adrienne Clarkson and her hubbie, John Ralston Saul, were there, and she asked a question. (Everyone else had to write their questions on a cue card, but I guess if you’re Adrienne Clarkson, then you’re not writing your question on a cue card.)

Gladwell vs Gopnik | Marc Weisblott
http://www.eyeweekly.com/city/scrollingeye/article/22644
“Today on the Scroll: A pair of Canadian journalists who are richer and more famous than anyone who lives here feign an argument about Canada’s future. […] Look, whatever it is, it’s not The New Yorker — for one thing, The New Yorker’s website is designed in a way that makes it possible to read the stories that are posted. Maclean’s also lacks a budget for cartoons, opting instead to dedicate its pages to Rebecca Eckler complaining about being ripped off for the movie Knocked Up, followed by her account of infiltrating a gang of online tormentors. Just in case you were wondering why neither of the star debaters still live here. […] Canada’s continued existence, on the other hand, is important to Maclean’s — and for the sake of a rebroadcast of the debate on the CBC’s Ideas on April 7 — but for a live audience in Toronto? Maybe to front-row sitters Adrienne Clarkson and John Ralston Saul but, otherwise, the topic was probably a turn-off to those journalism groupies and wannabe writers who’d eagerly hear tales of this pair’s workplace. Plus, the $30 ticket went for half the price to Maclean’s subscribers.”

08w12:3 The Street on Welfare

by timothy. 3 Comments

Society has always benefitted from unpaid or underpaid labour; in the past it was blatant slavery, but when that became unfashionable (and unprofitable contrasted to the production offered by machines rather than muscles) the emphasis shifted to calling unpaid labour ‘volunteers’ and nowadays, the most obvious example of all, ‘interns’. But since it is so unpalatable to recognize this as a contemporary form of slavery, we euphemize it away, and consider that we don’t have a slavery class, although there are many people working for a legally determined absolute minimum wage. In other words, we had to be legally coercive to get people paid for basic services. So now it’s officially illegal to not pay people below a certain amount, but this amount is so low that it’s guaranteed to keep the recipient poor. That way, there’s a lot more money available (which could otherwise go to the volunteers, interns, and making the minimum a livable wage) to those in the upper levels of management.

Inequality

(graph via Richard Florida’s Blog)

And when those in the upper levels of management over-reach, no problem. Privatize the profits and socialize the losses. As true in Canada as it is in the USA.

Meanwhile, I’m busy at my underpaid job and still carrying student loan debt on my account books from a decade ago.

– Timothy

The Street on Welfare | E. J. Dionne Jr.
http://goodreads.timothycomeau.com/shorty/washingtonpost/wallstwelfare/
“Never do I want to hear again from my conservative friends about how brilliant capitalists are, how much they deserve their seven-figure salaries and how government should keep its hands off the private economy. The Wall Street titans have turned into a bunch of welfare clients. They are desperate to be bailed out by government from their own incompetence, and from the deregulatory regime for which they lobbied so hard. They have lost “confidence” in each other, you see, because none of these oh-so-wise captains of the universe have any idea what kinds of devalued securities sit in one another’s portfolios. So they have stopped investing. The biggest, most respected investment firms threaten to come crashing down. You can’t have that. It’s just fine to make it harder for the average Joe to file for bankruptcy, as did that wretched bankruptcy bill passed by Congress in 2005 at the request of the credit card industry. But the big guys are “too big to fail,” because they could bring us all down with them.”