© 2003 John Phipps
Been there, done that, bought the t-shirt
Wadded into our drawers or lurking under our dress shirts, t-shirts threaten
to overtake modern man’s casual attire. Not a moment too soon, I say. The
concept of using a garment that is essentially underwear for outerwear is a
breakthrough that should no longer be just Victoria’s Secret.
My vast t-shirt collection is more than an enormous source of laundry for
Jan or shop-rags-in-waiting. It is a combination of photo album, travel diary,
cultural achievement summary, and family history. Long after I have
forgotten where Churchill is buried (somewhere overseas, I think) I will
recall with perfect clarity the underground shop where I first saw the “Mind
the Gap” London Tube t-shirt. T-shirts have become life’s mnemonic
devices – jogging tired memory cells to semi-awareness.
Almost every event, no matter how trivial can merit a t-shirt. Had your
wisdom teeth pulled? How ‘bout a t-shirt emblazoned with a catchy slogan
like “Novocain is for sissies”. I’ve seen shirts saying “Ask me about my
grandpuppies” and “My child is an honor student at IL State Juvenile
Facility”.
Like modern headwear, T-shirts allow modest and soft-spoken people to
shout comments sartorially. When our spouse starts wearing an “I’m with
stupid” shirt, we reach for our “– for the time being” shirt. In fact, when we
notice a white T-shirt unblemished by ad or admonition, we are often taken
aback by the avoidance of public discourse. I mean everybody has one
opinion, surely.
Our first emblems of belonging are often T-ball t-shirts that hang like
nightgowns on miniature ballplayers. Later in life our companies, customers
and vendors will try to “T-brand” us with perverse offers of free underwear
from strangers. (And we worry about candy?)
Many of my t-shirts are remembrances of museum visits in exotic locations
– Amsterdam, London, Cleveland. These proofs-of-culture are proudly worn
to display my tractability as a husband, evidence that when vacations are
planned, nobody consults me. Still they differentiate me in farmer groups
from those who wear mostly what arrives free in the mail.
In fact, my rule for “Great Art” has become: If it doesn’t look good on the
paunch of an unshaven middle-aged farmer, it isn’t Great Art. I have t-shirt
versions of Monet’s “Water Lilies”, Van Gogh’s “Wheatfield”, and Miss
Piggy as Mona Lisa.
Recently the Hanes Company, in an unexpected fit of customer empathy
announced that it would no longer attach scratchy tags to the back of the
collar of their t-shirts. It amazed me that several decades of t-shirts had to be
manufactured before someone in the company actually wore one for a day.
At any rate, this development has altered my marriage.
Jan once – no, make that has repeatedly – pointed out that our marriage
vows contained no reference to tediously picking out the stitching on t-shirt
tags. I countered with the salient argument: “Awww, jeeez!” Having
suffered without silence for most of my adolescent years from scratchy-tag
syndrome (yes, we’re talking the heartbreak of STS) the prospect of relief
without the gash that removal with tin snips produces was a key factor in my
decision to wed. If only I had waited 32 years.
Recently I have become fascinated with the problem of t-shirt aging. Where
do the little holes come from? And why do they seem to invite fingers to be
stuck through them, sometimes while in the choir loft. While it can make
amusing horseplay for tenors and other children, these small holes seem to
appear at random and frequently after I have used an air hose to blow the
crud and corrosion off a tractor battery. I sense a pattern here…
T-shirts also shrink disproportionately. Mine seem intent on strangling my
armpits while the neck sags to catch chaff and dust from above. Still, their
remarkable tensile strength comes in handy when shirt buttons fail and
unrestrained abdomens threaten to escape to freedom.
T-shirts are marvelous in their versatility. Caught without a handkerchief
during allergy season? That’s what shirttails are for. In fact, as a high school
basketball apprentice whose nose ran when his feet did (and yes, they both
smell – har, har!), I discovered that blowing your nose on your T-shirttails
not only was handy, it kept defenders from hand-checking or pushing off.
Few things can comfort like an old t-shirt fresh from the dryer on a cold day.
Moreover, nothing says love like identically folded t-shirts stacked neatly in
a drawer. And of course one mustn’t discount the benefits of wet t-shirts,
such as livening up a lackluster seed corn meeting.
Perhaps Plato put it best: “Underestimating underwear undermines
understanding”. Or was that Bluto?
New York-based Verizon, like Dallas-based AT&T, may forgo the grants if it doesn’t like the conditions.The likely upshot is billions of federal dollars will be available to bring service first to "unserved" areas via entrepreneurs and small rural telcos, versus farms being brought into the mainstream broadband fold. This suggests to me a two-tier broadband system, because after the stimulus money peters out, the revenue stream from small systems will not support upgrading or possibly even the expansion needed to handle sure-to-occur Internet use.
“We don’t have any plans to apply; we also have not made a decision not to apply,” Verizon Executive Vice President Thomas Tauke told reporters last month. “We’re certainly going to participate in those discussions to the extent that we can.”
The stimulus measure has a provision that makes NTIA a new battleground in the debate over so-called net neutrality. That’s the idea that broadband providers shouldn’t be permitted to favor some Web sites by delivering their content faster than similar content from other sites.
The law says recipients of NTIA grants must practice “nondiscrimination” in access to their networks and “at a minimum” must comply with broadband guidelines adopted by the FCC in 2005. Those principles, which aren’t formal FCC rules, say carriers should let subscribers have access to any legal Web content or service they choose as long as it doesn’t harm the network. [More]
Wireless-only households made up 14.7 percent of U.S. households in 2007, analysts say.
These wireless-only adults made up 13.6 percent of U.S. adults in 2007, but more recent surveys suggest national wireless-only households might number as many as 20 percent of U.S. households. Cord cutter penetration varies fairly significantly by state, though, according to the National Center for Health Statistics.
Household-level estimates ranged from a low of 5.1 percent in Vermont to a high of 26.2 percent in Oklahoma. Other states with a high prevalence of wireless-only households include Utah (25.5 percent), Nebraska (23.2 percent), Arkansas (22.6 percent), Idaho (22.1 percent), and Iowa (22.2 percent).
Other states with a low prevalence of wireless-only households include Connecticut (5.6 percent), Delaware (5.7 percent), South Dakota (6.4 percent), Rhode Island (7.9 percent), New Jersey (8.0 percent), and Hawaii (8.0 percent). Other states with a low prevalence of wireless-only adults include Vermont (4.6 percent), Connecticut (4.8 percent), Rhode Island (5.3 percent), Montana (5.4 percent), and New Jersey (6.1 percent).
Similarly, there is great variation in the prevalence of wireless-only adults across states, ranging from a low of 4.0 percent in Delaware to a high of 25.1 percent in Oklahoma. High rates of wireless substitution also are reported by adults living in the District of Columbia (25.4 percent). Other states with a high prevalence of wireless-only adults include Utah (23.9 percent), Nebraska (22.4 percent), Kentucky (21.6 percent), Idaho (21.3 percent), and Arkansas (21.2 percent). [More]
Phoenix, Las Vegas and San Francisco continued to lead year-over-year decliners, with drops over 30%. Minneapolis continued to have large month-to-month drops, while the rate of decline accelerated in Chicago and Tampa.Think about it. If you did everything right - came up with a 20% down payment, for example - and bought in 2007, say, you're still deeply underwater. In the desert.
Dallas, Denver, Cleveland, Boston, Charlotte and New York managed to avoid double-digit year-over-year declines. However, all of the 20 metro areas are in double digit declines from their peaks, with nine posting declines of greater than 30% and five of those (Las Vegas, Miami, Phoenix, San Francisco and San Diego) in excess of 40%.
“The large inventory overhang will continue to weigh on prices for some months yet. They could fall another 10%,” said Paul Dales, U.S. economist at Capital Economics. “Nevertheless, the more recent rise in mortgage applications and the rebound in home sales has made us hopeful that the rate of decline in house prices will soon moderate.” [More]
Protectionism is rooted in populism, and politicians feed on populism like ravenous dogs. But protectionism takes away competition, which forces Americans to pay more for any given product touched by a protected industry. “If we do this at home, we just raise costs for all those things,” notes Ross Korves, trade policy analyst for Truth About Trade and Technology, a nonprofit farmer-driven advocacy group. “If our goal is to repair more bridges, then what we’re telling ourselves with this ‘Buy American’ measure is we’re not going to repair as many bridges because it’s going to cost more money because we’re forced to use more expensive inputs.” [More]And the faithful all say "amen".
But these defences may not be strong enough. Multilateral agreements provide little insurance against domestic subsidies, fiercer use of anti-dumping or the other forms of creeping protection. Most countries are able to raise tariffs, because their applied rates are below the maximum allowed by their WTO commitments. They may choose to do so despite the possible disruption to global supply chains. And because global sourcing amplifies the effect of tariff rises, even action that is permissible under WTO rules could cause a lot of damage. The subtler variants of protection may be similarly disruptive. [More]Well, never mind, those protections are fair because they protect the "right people".
Both The Matrix and Superman Returns show the hero’s discovery of his powers. We see Neo learning martial arts almost instantaneously through the cable leading to his brain—a computer nerd’s fantasy; in a euphoric flashback, we watch the young Clark Kent finding out that he can fly. No parallels to these episodes of joyful self-discovery exist in the New Testament. But turn your attention from the canonical Bible to the Apocrypha—in particular, to the Gospel of Thomas, one of the so-called Infancy Gospels, stories of Jesus’s childhood nearly 2,000 years old—and you’ll find the child Jesus animating clay sparrows, restoring people to life, and even exacting revenge on his enemies. “He was again passing through the village,” the text relates, “and a boy ran up against Him, and struck His shoulder. And Jesus was angry, and said to him: You shall not go back the way you came. And immediately he fell down dead.”
If that last story sounds vaguely familiar, maybe you’re one of the millions around the world who have read Harry Potter and the Sorcerer’s Stone (1997), the first installment in J. K. Rowling’s unprecedentedly successful seven-volume series of fantasy novels, the first five of which have been made into blockbuster movies. Early on in The Sorcerer’s Stone, before Harry discovers his magical powers, his loutish cousin Dudley punches him in the ribs during a visit to the zoo. Unconsciously, an angry Harry makes the glass separating Dudley from a boa constrictor disappear. We soon learn that Harry, like so many of today’s fantasy heroes, is marked for greatness from infancy as the only person who can defeat a world-crushing evil. The final book in the series, Harry Potter and the Interminable Sequels—no, wait, that’s Harry Potter and the Deathly Hallows—has Harry (you guessed it) choosing to die to save the world and then returning to life, after a brief journey to an afterworld resembling (note the place) London’s King’s Cross railway station.
One reason that Disney finally made a movie out of C. S. Lewis’s Christian allegory The Lion, the Witch and the Wardrobe in 2005 may be that popular fantasy has become increasingly religious at heart. Peter Jackson’s brilliant film adaptations of J. R. R. Tolkien’s Lord of the Rings trilogy, on the other hand, probably don’t fall into the category of messianic fantasy, despite a quick episode in which the wizard Gandalf experiences a sort of death and rebirth; Tolkien’s chief inspiration was political, not religious, and Jackson remains faithful to that intention. [More]
Love your blogs, read them daily. I have an FFA speech-giving daughter that needs a bit of help.And here we go...
She needs to know the % of the US population actively engaged in production agrigulture. It's 2% or less, but she needs a link or some such to cite in her works. I've plowed-no pun- through all the USDA stuff I could stomach, to no avail....
In terms of farm sales, 125,000 farms account for 75 percent of production, compared to 144,000 farms accounting for 75 percent of production in 2002. [More]What this allows is an accurate, and I hope non-judgmental measure of product originators. These numbers can be parsed out from USDA (2007 Census of Ag) production numbers and for program crops from the EWG database, since subsidy payments are a pretty good analog for farm size/output.
Thank you for your inquiry to the National Agricultural Statistics Service (NASS) regarding the percent of the population involved in agriculture. According to the 2007 Census of Agriculture, there are 2, 204,792 farm and ranch operators engaged in production agriculture.
You would need to contact the Census Bureau to find out the number of the entire population. Regrettably, NASS only captures crop and livestock statistics for the U.S. We hope this information is useful to you. Please send our best to your daughter with her speech.
As someone who previously worked in a professional publishing operation, though, this is actually fairly sad. It’s not that mistakes don’t happen; they always do. It’s not that they’ve had to cut back on the layers of proofreading that would have caught this early. It’s that this was a really glaring mistake. I think there’s a chance they knew about it before they went to press, but decided to print it like this anyway.
In an earlier era, the editorial folks would have said, “No way can you print it like this. We have to eat the cost of fixing it, or our reputation for competence will suffer horribly.” But if that conversation took place, apparently the editorial folks at the Times don’t have that kind of pull anymore. [More]
A pensioner scared off two burglars who broke into his home with a loud blast on his bugle. Alex Wade, 78, hid behind a door and gave the two men a "short sharp burst" when they crept past. The bachelor, who lives alone, keeps the homemade instrument on his pillow for "emergencies". He said the burglars, who broke in through a downstairs window at 2.40am on Wednesday, ran off empty-handed.
Mr West, from Coventry, West Midlands, even tried to chase them in his pyjamas, but the thieves managed to get away. His courageous actions have been praised by West Midlands Police and led to the arrest of two men. [More]
The process of cooking coal into liquid fuel, on the other hand, has already proven itself on a massive scale. Take coal, add some water, cook it, and you've got a liquid fuel for your car. The hydrogen in the water bonds to the carbon and voila: hydrocarbons, such as octane. It's the very fact that coal-to-liquids could work that make them such a scary idea for people devoted to fighting climate change.
The Nazis used the so-called Fisher-Tropsch process to provide up to half of their transportation fuel needs during World War II. Later, South Africa began a major coal-to-liquids program during the Apartheid era and now maintain the world's largest CTL industry in the world. The country's factories produce 160,000 barrels of fuel a day, a little more than all the residents and businesses in Utah use each day. The traditional process uses carbon monoxide, carbon dioxide, and hydrogen as the ingredients in the molecular soup that gets turned into hydrocarbons. The Science process uses just CO2 and hydrogen. Glasser's new production method allows them to set a lower limit on the amount of energy that would be needed to transform solid coal into fuel.
The very best possible CTL process would require 350 megawatts of input to make 80,000 gallons of fuel; the current process uses more than 1,000 megawatts.
Even with the small efficiency gains, a large, domestic, carbon-intensive source of transportation fuel would throw a wrench into many plans to reduce emissions from vehicles. [More]
The 2009 expansion will increase the population covered by Sprint by over 15 times. Add the cities planned for 2010 - which includes the Big Kahuna, New York City - and Sprint's WiMAX coverage will be available to over 22 million potential customers, an increase of 35 times its current availability.I was counting on WiMax to solve my broadband headache, but it look right now like I'm backing Betamax. I'm not so sure the stimulus package will get that last 5% of us either as two departments will be heavily lobbied by the telcomm industry to be able to skip that non-paying remnant.
But the rival 4G standard, LTE, isn't standing still. As we noted last month, Verizon is planning its first LTE roll-out for next year. LTE also has garnered significant support over the past year, while WiMAX has lost some of its luster.
It has always been known that WiMAX would be deployed before LTE. The question is whether it can parlay that head start into a global success. [More - also follow the link above for a good explanation of LTE]
Sony’s partnership with Google is brilliant in that it can help to minimize the current advantage the Kindle has of being owned by Amazon which provides a simple and seemless ordering experience, as well as being the current leader in convincing publishers to make their books available for electronic distribution through the Kindle.
It is my believe that eventually, the Kindle, and whoever else emerge in this space, will replace many printed books. We will begin to see students use them in school, as well as other new business models popping up where travelers will be able to rent a kindle for a flight or cruise or other travel event and download content on their rented device.
Early on, Sony needs to prove it is a viable contender to the Kindle. They need to made their product available at a below market cost to convince consumers to give it a try. I am sure there is some fear that Sony may not stay in the space, thus they would rather go with the Kindle because they know Amazon is in this for the long haul. We need to see the Sony product in the hands of people. If I were Sony, I would send it to leading bloggers, executives and other influencers who could help Sony to gain share.
Just like with Gillette, they switched from being in the razor business to being in the razor blade business. Sony should not focus so much on making money initially on its device, but rather the revenues from the downloads. You never get a shot at the download revenues if you do not have devices in distribution. [More]
Evolutionary theorist Alastair Clarke has today published details of eight patterns he claims to be the basis of all the humour that has ever been imagined or expressed, regardless of civilization, culture or personal taste.
Clarke has stated before that humour is based on the surprise recognition of patterns but this is the first time he has identified the precise nature of the patterns involved, addressing the deceptively simple unit and context relationships at their foundation. His research goes on to demonstrate the universality of the theory by showing how these few basic patterns are recognized in more than a hundred different types of humour.
Clarke explains: "One of the most beautiful things about the theory is that, while denying all previous theories, it also unites them for the first time. For decades researchers have concentrated on limited areas of humour and have each argued for causality based on their specific interest. Now that we have pattern recognition theory, all previous explanations are accommodated by a single over-arching concept present in all of them.
"The eight patterns divide into two main categories. The first four are patterns of fidelity, by which we recognize the repetition of units within the same context, and the second four are patterns of magnitude, by which we recognize the same unit repeated in multiple contexts.
"What this all means is that the basic faculty of pattern recognition equips us to compare multiple units for their appropriateness within a certain context, effectively selecting the best tool for the job, and then to apply our chosen unit to as wide a range of contexts as possible, effectively discovering the largest number of jobs that tool is good for.
"Basically humour is all about information processing, accelerating faculties that enable us to analyse and then manipulate incoming data."
Clarke lists the patterns that are active in humour as positive repetition, division, completion, translation, applicative and qualitative recontextualization, opposition and scale. [More]
After enabling the feature, Undo Send works much like Gmail’s other “undo” features. When you send an email, you get a message confirming it has been sent, along with a link to “Undo.” This message lasts for 5 seconds, at which point you lose the opportunity to take it back. [More]
Elizabeth Eisenstein's magisterial treatment of Gutenberg's invention, The Printing Press as an Agent of Change, opens with a recounting of her research into the early history of the printing press. She was able to find many descriptions of life in the early 1400s, the era before movable type. Literacy was limited, the Catholic Church was the pan-European political force, Mass was in Latin, and the average book was the Bible. She was also able to find endless descriptions of life in the late 1500s, after Gutenberg's invention had started to spread. Literacy was on the rise, as were books written in contemporary languages, Copernicus had published his epochal work on astronomy, and Martin Luther's use of the press to reform the Church was upending both religious and political stability.
What Eisenstein focused on, though, was how many historians ignored the transition from one era to the other. To describe the world before or after the spread of print was child's play; those dates were safely distanced from upheaval. But what was happening in 1500? The hard question Eisenstein's book asks is "How did we get from the world before the printing press to the world after it? What was the revolution itself like?"
Chaotic, as it turns out. The Bible was translated into local languages; was this an educational boon or the work of the devil? Erotic novels appeared, prompting the same set of questions. Copies of Aristotle and Galen circulated widely, but direct encounter with the relevant texts revealed that the two sources clashed, tarnishing faith in the Ancients. As novelty spread, old institutions seemed exhausted while new ones seemed untrustworthy; as a result, people almost literally didn't know what to think. If you can't trust Aristotle, who can you trust?
During the wrenching transition to print, experiments were only revealed in retrospect to be turning points. Aldus Manutius, the Venetian printer and publisher, invented the smaller octavo volume along with italic type. What seemed like a minor change — take a book and shrink it — was in retrospect a key innovation in the democratization of the printed word. As books became cheaper, more portable, and therefore more desirable, they expanded the market for all publishers, heightening the value of literacy still further.
That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn't apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can't predict what will happen. Agreements on all sides that core institutions must be protected are rendered meaningless by the very people doing the agreeing. (Luther and the Church both insisted, for years, that whatever else happened, no one was talking about a schism.) Ancient social bargains, once disrupted, can neither be mended nor quickly replaced, since any such bargain takes decades to solidify.
And so it is today. When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution. They are demanding to be told that old systems won't break before new systems are in place. They are demanding to be told that ancient social bargains aren't in peril, that core institutions will be spared, that new methods of spreading information will improve previous practice rather than upending it. They are demanding to be lied to.
There are fewer and fewer people who can convincingly tell such a lie. [More of a wonderfully insightful essay]
Christine Nicol, Professor of Animal Welfare at the University of Bristol, said: “There is no strong published evidence of pain in egg-laying hens but it's not unreasonable to think there may be a mismatch in the size of birds and the eggs they produce. We do often spot bloodstains on large eggs. As a personal decision I would never buy jumbo eggs.”
Prices for very large eggs have decreased slightly over the past year, something Mr Vesey believes may make farmers think again about their production. He would like to see higher prices paid for medium eggs to encourage production. There is little consumer demand for small eggs, which weigh less than 53g and are mostly used in processed food.He thinks by changing the protein element of poultry feed it is possible for farmers to slow down the process of egg production so that hens can lay smaller eggs. He also suggests that farmers will make more profit from producing medium eggs because there will be fewer breakages. The volume of egg shell is the same on a medium as on a large or very large egg. Thin shells mean more cracked eggs.Mark Williams, head of the British Egg Industry Council, said shoppers mostly opted for large eggs, thinking they offered better value for money. “But it is possible consumers could be switched off from buying large overnight,” he said.
Alan Pearson, spokesman for the British Poultry Veterinary Association, said: “Frankly I think there are bigger welfare issues that people have in their minds, such as hens in cages. The size of an egg rarely causes problems for the bird.”[More]
Hiroshi Yamada, a carnation grower in Shizuoka prefecture, is one of 3.2 million Japanese farmers and fishermen who depend on Norinchukin Bank for financing and support. Now the Tokyo-based bank, hit by losses on holdings backed by overseas property loans, is asking him for help.The mere suggestion of ag policy reform in Japan is mind-boggling. If Japan finally decides their extreme protectionism and land use restrictions are simply unaffordable or worse, standing in the way of economic progress for the rest of the country, it will defang one of US producers' favorite bad actors for us to compare too.
Norinchukin has racked up at least 816 billion yen ($8.3 billion) in realized and unrealized losses on investments in securitized products, including collateralized debt obligations, making the 85-year-old cooperative bank the biggest loser in Asia from the credit contagion gripping the global economy. It wants its nationwide network of co-ops to come up with 1.9 trillion yen of financial support.
“It’s unbelievable what’s happening,” Yamada, 42, said in an interview at his farm, perched on a hill overlooking the sea on the Izu peninsula, southwest of Tokyo. “The fallout isn’t apparent yet, but this will take its toll.”
Yamada relies on his local co-op for production advice, marketing and delivery of fuel oil to heat his greenhouses. Employees haul the fuel by truck up a steep, winding road to his farm. Now, after his earnings fell 10 percent last year, he’s concerned that Norinchukin will return less profit to the co-op.
More pain may be in store: the bank, which raised its bets on securitized products even after they brought down New York- based Bear Stearns & Cos. and triggered record losses at Merrill Lynch & Co., held 6 trillion yen of such investments at the end of December. Should it need more money, members may balk, threatening its ability to serve Japan’s agricultural sector as the nation heads into its worst postwar economic slump.
...
Norinchukin lost sight of its core mission of supporting and developing Japanese agriculture, he said.
“They became a social climber,” said Yamada. “They’ve got to go back to basics.”
That may not be an option, according to Yamashita, the former agriculture ministry official. The declining farm economy and a shrinking and aging rural population mean Norinchukin can’t go back to its roots, he said.
“They have no outlet in the domestic market,” he said.
The number of full-time farmers in Japan fell to 2 million last year from 3.7 million in 1985, according to the agriculture ministry. The number of fishermen was 204,330 in 2007, down from 325,000 in 1993. Another 1 million people rely on agriculture as their primary income source, according to government data.
More than half of farmers’ income in Japan is attributable to government support, including price supports and import barriers, according to the Organization for Economic Cooperation and Development.
Agricultural Reform
With the farming and fishing industries unable to count on dividends and returns from Norinchukin, pressure may build to reform agricultural policies to make them more efficient and competitive, said Yamashita, who advocates such reforms.
Reforms may include dismantling the current nationwide cooperative model in favor of smaller, independent organizations, he said.
[More]
FORECASTERS OF the fortunes of nations are no different from Wall Street analysts: they all rely on the past to predict the future. So it is no surprise that China’s rapid economic growth in the last thirty years has led many to believe that the country will be able to continue to grow at this astounding rate for another two to three decades. Optimism about China’s future is justified by the state’s apparently strong economic fundamentals—such as a high savings rate, a large and increasingly integrated domestic market, urbanization and deep integration into the global trading system. More important, China has achieved its stunning performance in spite of the many daunting economic, social and political difficulties that doomsayers have pointed to as insurmountable obstacles to sustainable growth in the past. With such a record of effective problem solving, it is hard to believe that China will not continue its economic rise.
Yet, while China may sustain its growth for another two to three decades and vindicate the optimists, there are equally strong odds that its growth will fizzle. China’s economic performance could be undermined by the persistent flaws in its economic institutions and structure that are the result of half-finished and misguided government policies. A vicious circle exists in which the Communist Party’s survival is predicated on the neglect of fundamental aspects of society’s welfare in favor of short-term economic growth. And many of the same social, economic and political risk factors the government has thus far sidestepped—heavily subsidized industries, growing inequality, poor use of labor—remain. Some are becoming worse. [More]
IS CHINA’S rise inevitable? Well, as we’ve learned to our great chagrin over the past twelve months, there’s nothing inevitable about continued rapid economic expansion or the near-term success of any economic model, and past performance is most emphatically not a guarantee of future returns. And, as with any lower-income developing country, there are plenty of visible and unforeseen pitfalls that could hurt China’s growth prospects over the coming years and decades.
However, as author and newspaperman Damon Runyon famously remarked, “The race is not always to the swift nor the battle to the strong—but that’s the way to bet.” And when taking odds on the potential of today’s emerging markets to mature into wealthier and more powerful states, you had best be betting on China.
The mainland is already getting there faster than any major economy before it. And, the risks of an outright economic derailing over the next ten to twenty years are much lower than commonly believed. [More - same source as above]
China is down. It is not out. This has important implications for America.
If China were truly like the old Soviet Union, the coming mass unemployment might be the shock that finally turned the people against their rulers. If it were truly like Japan, it might spend a decade or two chugging along but not aligning its systems to new international realities. In either case, Americans might feel sorry for China’s still-impoverished masses—but less worried about its competitive challenge.
I suspect that China will be like neither. Most of its people will still be very poor. Most of the jobs they hold—when they have jobs—will still be near the bottom of the global value chain. But they will not, I believe, be in fundamental revolt against the country’s governing system. And the companies they create, manage, and work for will be constantly trying to improve their position on that value chain. Two years ago, after reporting on factories in Shenzhen, I described an economic symbiosis in which Chinese workers assembled many of the world’s products—while inventors, designers, shareholders, and consumers from America or other rich countries got the lion’s share of the financial returns. It is the announced policy of the Chinese government, and of many Chinese companies, to keep more of the rewards in China.
Outsiders can rightly criticize the Chinese government if it tries to sneak in new export subsidies or push the RMB’s value back down. But no one can criticize its ambition to increase the rewards for its people’s work. Many Chinese companies will fail or make mistakes under today’s intense pressure. But many are using the moment to prepare for their next advance. The question for Americans to think about is how we are using the same moment. [More]
Structural changes in Europe’s labour markets suggest that jobs will go faster than in previous downturns. Temporary contracts have proliferated in many countries, as a way around the expense and difficulty of firing permanent workers. Much of the reduction in European unemployment earlier this decade was due to the rapid growth of these contracts. Now the process is going into reverse. In Spain, Europe’s most extreme example of a “dual” labour market, all the job loss of the past year has been borne by temps. In France employment on temporary contracts has fallen by a fifth. Permanent jobs have so far been barely touched.
Although the profusion of temporary contracts has brought greater flexibility, it has laid the burden of adjustment disproportionately on the low-skilled, the young and immigrants. The rising share of immigrants in Europe’s workforce also makes the likely path of unemployment less certain. As Samuel Bentolila, an economist at CEMFI, a Spanish graduate school, points out, the jump in Spain’s jobless rate is not due to fewer jobs alone. Thanks to continued immigration, the labour force is still growing apace. In Britain, in contrast, hundreds of thousands of migrant Polish workers are reckoned to have gone home.
Despite having few immigrants, Japan is also showing the strains of a dual labour market. Indeed, its workforce is more starkly divided than that of any other industrial country. “Regular” workers enjoy strong protection; the floating army of temporary, contract and part-time staff have almost none. Since the 1990s, the “lost decade”, firms have relied increasingly on these irregulars, who now account for one-third of all workers, up from 20% in 1990.
As Japanese industry has collapsed, almost all the jobs shed have been theirs. Most are ineligible for unemployment assistance. A labour-ministry official estimates that a third of the 160,000 who have lost work in recent months have lost their homes as well, sometimes with only a few days’ notice. Earlier this year several hundred homeless temporary workers set up a tent village in Hibiya Park in central Tokyo, across from the labour ministry and a few blocks from the Imperial Palace. Worse lies ahead. Overall unemployment, now 4.1%, is widely expected to surpass the post-war peak of 5.8% within the year. In Japan too, some economists talk of double digits. [More]
Geneva: There have been over 325,000 announced layoffs in the financial sector since August 2007, the International Labour Organization said on Monday, noting that 40 percent of those cuts, or about 130,000 jobs, were made since October of last year. More job cuts in the financial sector were to be expected as the full extent of the economic crisis became clear, the ILO said. The numbers did not include independent contractors and subcontractors.
Some of the largest announced cuts have come from US-based banks including Bank of America and Citigroup, together making up over 35 percent of global job cuts. The Swiss bank UBS, the largest wealth manager in the world, also announced 11,000 layoffs. In a report released ahead of a two day conference set to begin on Tuesday about the future of the 20 million jobs in the global financial sector, the ILO said that while the entire world's economy would feel the fallout, centres like New York and London were to bear the immediate brunt of these layoffs. "The impact will be major, considering that jobs in New York City's finance, insurance and real estate sectors account for one-third of personal income earned in the city," the report said. "The combined New York metropolitan area alone is expected to lose up to 100,000 financial services jobs." The impact on London and other hubs would be similar. Moreover, for each financial sector job lost, one to two other layoffs would be expected, feeding a vicious cycle of economic downturn. In the US, some 4.1 million people worked in the sector while in Europe, in 2006, 5.6 million people were employed in finance. [More]
Human capital is worth quite a lot. Gary Becker, the Nobel Prize-winning University of Chicago economist, figures that in a modern industrialized economy, 75% to 80% of a person's economic output comes from human capital (as opposed to, say, land or machinery). Of course, during the bubble years (first stocks, then housing), the noneconomists among us didn't exactly think about it that way. "People became mesmerized by how rich they were," says Becker, "and didn't realize the crucial asset they had in their earning power."
The tide is now turning. To see how, let's check back in with the savings rate. After it went negative in late 2005, it meandered back into minimally positive territory. Then, last year, it started bounding upward. By the fourth quarter, we were saving 3.2% of what we brought in. In January we hit 5%. No longer are we disrespecting our paychecks, treating employment income as an also-ran source of wealth. "People are realizing their job is their real source of financial stability," says Ellison, "that they have to live within the means of their job, not within the means of their assets. We're relearning how to create wealth."As we do this, we'll start looking at our jobs differently. If that thing you do at the office every day is suddenly your sole financial lifeline, you'll approach it more cautiously. When you've got only one chip left, you're much less willing to put it on the table. In this new era, a predictable salary is more appealing than the chance of scoring big with bonuses and stock options. And having a government job — one of the last bastions of security — looks even better. One day soon you might find yourself perusing a list of the fastest-growing, best-paying professions, trying to picture yourself as an actuary. And instead of spending thousands of dollars to build a new deck, you're more likely to use that money to take a class.
Careers expert Dick Bolles sees another shift coming. If as a society, we turn our attention back to work — if we dote on our jobs as much as we did on our homes and portfolios in an earlier era — then we'll have to start asking deeper questions about why we do what we do. In December, Bolles noticed that a book he wrote in 1970 was back on the best-seller list. What Color Is Your Parachute? is about job-hunting and career-changing, but it's also about figuring out who you are as a person and what you want out of life. "Why are people rushing out to buy a book that talks about more meaningful work?" asks Bolles. "They're realizing they have to rethink work if they've got no Plan B. It reframes the whole issue of, What type of work am I willing to do?" [More]
On Mar. 12, Standard & Poor's Ratings Services lowered its long-term ratings on General Electric Co. (GE) and units, including General Electric Capital Corp. (GECC), by one notch to AA+ from AAA. S&P affirmed the A-1+ short-term credit ratings. The outlook is stable.
The main factor in the downgrade was our assessment of the stand-alone credit profile of financial services unit GECC, which we now view as A, compared to the A+ we had indicated before. [More]
However, there has been serious criticism against the credit ratings by the credit rating agencies. According to experts, in the wake of increasing cases of well rated financial filing bankruptcy has raised the concerns of investors and other regulatory authorities, who heavily depend on these rankings.
Credit rating agencies found to be lax in downgrading companies. Taking the example of Enron, which had filed its bankruptcy, was having investment grade mere four days before its bankruptcy. More interestingly, the credit rating agencies were said to be aware of the company’s financial problems for months before.
In addition to this, many rating agencies have been found to be having familiar relationship with company management, which may lead them to undue influence and thereby fall prey to the investors’ wrath.
The ratings given by the agencies affect the company’s performance, especially when a company is downgraded. The fall in the credit rankings is most often considered as a fall in the credit worthiness of that company. Several recent examples of downgraded ratings of the companies include Goldman Sachs and Lehman Brothers.
According to experts, these financial institutions once held AAA or higher ratings by the rating agencies but later, as their financial conditions started getting into trouble, the rankings started tumbling. But the trust worthiness of these ratings itself has come under doubts, as the rating system is not transparent and the agencies take a suspicious stand while taking about the system of giving ratings to the companies.
These agencies are sometimes accused of being oligopolistic, while sometimes their rating methodology was placed under question, particularly assigning AAA ratings to structured debt, which in a large number of cases has subsequently been downgraded or defaulted. [More]
So it is with Moody’s Corp. Over the years, the credit- rating company’s constant refrain has been it’s an independent body that publishes its opinions accurately and impartially. Never mind that it gets paid by the same companies it rates. Moody’s says it can manage that conflict of interest.As our financial industry evaporates the presumption of trust in investor minds with breathtakingly slip-shod - if not outright fraudulent - work, there could arise opportunities for rating agencies based on another model. Maybe the investor should pay, for example.
“The market’s trust in and reliance upon Moody’s” are part of the “raw materials that support our business,” the company said in its 2005 annual report. “Independence. Performance. Transparency,” it went on. “These are the watchwords by which stakeholders judge Moody’s.” Moody’s also cites its code of professional conduct, through which it seeks “to protect the quality, integrity and independence of the rating process.”
Now compare that with what Moody’s told a federal judge in New York last September in response to accusations made in a shareholder lawsuit, which said Moody’s claims of independence were false.
“Generalizations regarding integrity, independence and risk management amount to no more than puffery,” Moody’s said in court papers. As such, alleged “misstatements of this nature are insufficient to sustain a claim under the securities laws.”
Puffery, huh?
Making Sense
Finally, Moody’s has delivered a sensible explanation for how its ratings became so unreliable: It didn’t believe its own platitudes, or at least it didn’t think they would be binding in court. The defense hasn’t worked, though. On Feb. 18, the judge in the case rejected Moody’s puffery argument, and ordered that the lawsuit proceed.
In legalese, puffery refers to an expression of opinion by a seller that isn’t made as a representation of fact. It may be a salesperson’s exaggeration about a product’s quality that isn’t a legally enforceable promise. Or it might be an ad that claims a company’s product is superior, as Black’s Law Dictionary explains it. Think of a dealer who says a car “drives great,” or a beer commercial with the slogan “less filling.”
For all the toxic mortgage-backed securities and structured- finance garbage that Moody’s rated as AAA, I never imagined Moody’s would use the word puffery to characterize the principles it brought to the job of grading investments that wind up in the portfolios of retirement funds and money-market accounts. It would be like the pope revealing that his belief in God was just fluff, or Mister Rogers complaining that small children were awful to be around.[More]
The rating agencies also argue that even an “investor pays” business model can involve some conflicts, since investors would prefer lower ratings (and thus higher yields) for newly issued bonds, as would anyone who has sold short any other security of the issuing entity. With respect to subsequent downgrades, investors who already own the bonds would disfavor them, while short sellers would welcome them. Nevertheless, the potential conflicts seem substantially less severe than for the “issuer pays” model. [More]As things now stand I wouldn't let the current market raters judge a skating competition.
For many environmental advocates, of course, these discussions are of secondary importance; what matters most is that green jobs will help the planet. They'd be wise to be careful there, too. Indeed, the most successful green jobs program to date is one that no environmentalist wants to brag about: the conversion to corn-based ethanol. A recent United Nations report estimated that the heavily subsidized U.S. ethanol industry provides employment for 154,000 Americans, about five times as many as the wind power industry and nearly 10 times as many as the solar industry. That goes a long way to explaining why, despite mounting evidence showing that corn ethanol is a failure (some would say a disaster) on the environmental front, U.S. policy appears to be on cruise control. At its base, corn ethanol is not a green policy so much as a jobs policy—and its success in that respect has made it almost impossible for the government to change course. [More]Now factor in the ease with which this program seems to navigate against the river of logic against it. It is a political marvel requiring essentially no budget exposure for the government by virtue of mandated use. The path of least resistance is to keep raising the mandate and let the cost be borne by consumers obscurely.
