« February 2004 | Main | April 2004 »

March 23, 2004

Back from Shasta

It was a great trip and we both made it back safely. I've posted some pictures HERE.

Posted by wonko at 12:42 PM | Comments (0) | TrackBack

March 17, 2004

March Moods

Just got back from LA. Leaving tomorrow for Shasta. Bruce and I will do Sergeants Ridge and come back Monday.

Things are happening. The struggle continues. Lately I've been losing momentum as I try and break free of Earths gravitational pull and move towards that other world. The urge to cut the engines and let myself be pulled back is significant. Only my stubbornness and misguided sense of fairness keep me going.

My only hope is that things get resolved soon so I can continue struggling.

Posted by wonko at 12:52 PM | Comments (1) | TrackBack

March 04, 2004

Sherwins Pics

Derek and I did the Sherwins this morning. Normally I don't post when I do them, but he took some great pictures. I especially liked this one of me launching the cornice. Click for a larger picture.

UPDATE: Derek posted his pics HERE from today.

Posted by wonko at 06:57 PM | Comments (0) | TrackBack

March 02, 2004

Vons Strike Over. The trickle down lie.

The credible rumor is, that the Vons Strike is ending. A majority of Union members have voted to approve a new contract which is not so unlike the contract they declined way back when the strike started. Obigabu points out on the Vons Strike Post that there aren't any Walmart shopping centers in southern California, so why are people saying that the strike is Walmarts fault. First of all, it was Kroger that said it was because of pressure from Walmart they had to reduce benefits. More on topic though, the example of Vons blaming Walmart is a perfect example of the trickle down lie.

I was just listening to a news talk show as they talked about the recent trend towards outsourcing work overseas. Specifically how the work being sent is increasingly more skilled labor, ie. jobs Americans want and go to school for. The Bush administration has stated publicly that they think sending jobs overseas is a good thing (and have encouraged companies to do it via tax breaks). The guy on the talk show than said, matter-of-factly, "Of course prices HAVE gone down as a result, but is it worth it." I was flabbergasted. Prices have NOT gone down, they've only gone up. The other thing that has gone up is executive salaries.

While sending jobs overseas does not seem to relate to trickle down economics (reagonomics), it is actually the same thing. In this instance, jobs are being taken from the middle and lower class and sent overseas so that companies can make more profit by lowering costs. Where does this money go? The claim is that it lowers prices and thus helps everyone, even those that lost their jobs. In a nutshell, "Lets give the big companies a break and watch as the benefit to them trickles down to helping the middle majority," in this instance via lower prices. The problem with the theory is, prices have not gone down. Prices never really go down. They go down temporarily sometimes, but always quickly inflate once the need for competition is gone.

The pizza wars from the 80s are a great example. In the 80s, where I lived anyway, most of the pizza places were family owned and not chains. Most restaurants in general WERE chains in Phx at that time, except for pizza places. Than all of the chains moved in, Dominoes, Pizza Hut, etc.. They offered pizza at significantly lower prices to their family run counterparts. Slowly, the family restaurants started to fold. As they did, the price of pizza at the chains started to increase. Today, with far fewer family run pizza joints around, the price of pizza from the chains is higher than they ever were at the family restaurants. This is in stark contrast to the claim that chains can use their economies of scale to have lower prices. While you can point to some chains that do offer lower prices (specifically fast food), you'll find that most chains and/or companies that claim to benefit from economies of scale and/or outsourcing are not cheaper, most not all. The ones that are cheaper will likely raise their prices once their competition is dead.

So who benefits? Where is all this savings going? Executives. The problem with trickle down economics is that it assumes those who have a lot of money will spend their money. It assumes that the more they make the more they'll spend on the lower classes. This has simply proven to be not true. Why this doesn't happen is still up for debate. Its likely that the money doesn't trickle down because the more they have, the more they want to keep. Also, the money they spend goes to luxury items that only benefit a very small minority of those in lower classes. The same goes for these companies who save so much money by sending our jobs overseas. The executives pay themselves more based on higher profits, but no one else in the company or in this country benefits.

This blog raises the question of Who Deserves Company Profits? They make the argument that all employees of the company have a stake and are taking risks for the sake of the company. The argument that the executives are taking all the risk and thus should get the bulk of the profit is simply not true. Years later, there have still been no indictments in the Enron debacle. Corporations are set up to shield their executives from liability. I could argue that the risk for executives is less. If you look at the end of the dot-com era, you'll see that the execs knew when to get out, far before their employees did. They were able to see the coming decline (by having all the information) and sell their shares, at a handsome profit, before the sh*t hit the fan. Once it did hit the fan, it was the employees that really got the brunt of the downside. They too owned stock and had options, which were suddenly worth nothing even as they were losing their jobs.

In the U.K. the two highest paid executives in the country make 24 times as much as the average worker. In the US executives make upwards of 411 times that of the average worker. What is the meaning of this disparity? The answer is in the culture. It would be unacceptable in the UK for executives to make so much more than the employees. A companies board would never agree to that. As an example of the cultural difference. A European bank reported record profits the other day and the American news hailed it as a triumph. Meanwhile, a British paper has the headline, "HSBC denies £7.8bn profit is excessive". They talk about the HUGE salary of £2.4m of one executive. While that is a lot of money, it pales in comparison to what many American CEOs make. Why would profit be excessive? Its because of a fundamental difference in culture. In the US, money is to be hoarded. The more you have, the more successful you are deemed to be. In other parts of the world, they would question why a company needs so much profit. Why didn't they pay their employees more or contribute more? It is understood that the profit is doing little for the economy if it isn't being spent.

Which brings us back to trickle down economics. This last tax break for the rich was supposed to fuel our economy because what else would rich people do with their new found money, other than spend it. The answer is, hold it and grow it. This last Christmas was the big litmus test. Spending for Christmas was good overall, but more for luxury items and not traditional middle class gifts. After Christmas, stores still had full shelves. The middle class did not have enough money to spend, even though the rich seemed to have more, which gives us our jobless recovery.

"With, without"
"And who'll deny it's what the fighting's all about?"
-Us and Them

Posted by wonko at 11:04 AM | Comments (11) | TrackBack