You don't need to understand Those People, but

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Saturday November 26, 2016 · 5:25 AM PST

2016/11/26 · 05:25

you do need to take the time to understand yourself. Yeah, there is no shortage of diaries saying you need to understand midwestern voters and why they dumped you. But no matter what you do, they will continue to dump you (or occasionally vote for you as punishment against the republicans), until you are honest with who and what the democratic party is. I’ve been here quite a while, and I’m now convinced that the democratic party is a bunch of wall street lackies running a citizenship for votes racket and using minorities as human shields. It’s not that there is anything wrong with this. If you think the best way to advance civil rights is as wall street lackies, bully for you! But, be prepared to make enemies you otherwise don’t need.

For example, take immigration. The way I see it, there are 3 attitudes on immigration:

1) Immigration is just a number. Anyone throws a proposal on immigration numbers in the hat for any reason they desire, everyone votes, and that is what immigration levels we go with. After all, it’s just a number.

2) Immigration is a very important number that we plebes are too stupid to talk about. Best leave it to the man behind the mirror so the miracle of the free market can determine the ‘right’ value of immigration. And it’s definitely not a problem so no one better talk about it!!!!

3) Borders are obsolete. Any cap on immigration must be opposed!

It is pretty clear to me that for whatever reason, most people here are in camps 2 & 3, and the attitude is that if you are in camp 1, you must be a racist. Sorry, but when the attitude here on Britain went from “Gee, if we didn’t fight the revolutionary war, we might be better off for it and might have ended slavery earlier and peacefully” to “those racist assholes” because of brexit, calling people racists lost its sting. You might say ‘those people are racist and want to limit immigration to keep those people out’, but what about you? How many diaries on demographics do you have to right before you will realize you are simply using ‘those people’ and expect them to meekly follow your lead? They are coming here to find jobs, not be your political stooges. And are there no racists in Mexico? Are rural americans simpletons that you have to save, while rural mexicans (or rural people from the middle east) are beacons of enlightenment? If you want to be ruled by mexicans, why not cut to the chase and move to mexico? I’ve been there, it is quite nice and the people are friendly. You’ll probably like it. And, by the way, what is with the attitude that the worst thing you can do to a mexican is force him to stay in mexico? Condescension anyone? I don’t worry much about immigration, but I do worry about people in camps 2 & 3. If you are telling people there can’t have a dialog on immigration, people will go elsewhere and you’ll continue to make enemies you don’t need.

And by the way, when trump says hillary wants to open borders, everyone laughed. Then when this site elevates a Booh hooh, our plan to eliminate the nation state has been halted diary, you really turn this place into ”trumps crazy conspiracy theories are us”, and that is no small feat.

And let’s talk about trade. Again, tariffs are just a number. Any value is equally consequential as any other number. Who benefits and who loses differs though. But, to believe what is said on this site is to simultaneously believe that NAFTA is inconsequential, but the repeal of NAFTA will have dire consequences. The cognitive dissonance is stunning. The wall street lackie croud here will say & believe anything. They’ll reference youtube videos and advertisements of robots to claim “it is all automation!!!! Nothing to see here, move along, move along”. But if it is all robots and the free trade pacts are inconsequential, why not ditch the pacts? Because they know it is a lie. Increased automation requires increased capital spending and increased energy use, both of which are on a 20 year decline in the US (as a share of output), the only thing up is ‘material’ as finish-manufacturing of semi-finished imports becomes the rage. Whether it is cabinet makers buying pre-cut wood and assembling instead of cutting the wood themselves, or automakers importing engines and transmissions, it is all the same: outsourcing. If it were robots, tariffs wouldn’t matter or would even be helpful since automation benefits when labor prices rise. Everyone knows it is a lie. But wall street bankers love when tariffs drop and they can play 3rd world sweatshop against 3rd world sweatshop. So if you are a wall street lackie, this topic is verboten. It can never be the cause of anything. But if people can’t talk about this here, and they will go somewhere else. And if you rec up a diary that if it had an honest title, it would be there was only 16 million of you and we decided you aren't important, so fuck you and your community too, well, you won’t be making any friends that way either. Great wall street lackie position though. And since those people are mostly white, you get to call them racists (human shield anyone?).

And let’s look at foreign policy. It is a disaster. When Bush left office, Iraq was a basket case. Now Iraq, Syria, and Libya are basket cases. And what is the response? Hide the mess. Round up those war refugees, call them ‘migrants’, and force people to take them in. Apparently ending the conflict by withdrawing support for the rebellions isn’t an option. Neither is getting the gumption together to end the mess militarily an option. But hide the mess, and call anyone who won’t help a racist, that is gold. So the UK drops out of the EU and Hungary votes 98% to reject the resettlement plan, so they are all racists. But racial attitudes here are all peachy keen because only rural whites are culturally backward, those people are awesome though. Demographics!!!

And by the way, the EU going from a financial bully pillaging countries like Greece and Portugal to a champion of the working man because of brexit…??? That is some whiplash you are handing out. But when you define yourself by who you hate, manic swings like this are common.

Ultimately, this is all fine. Don’t let me tell you what to do or what to think. It is a free country. you might honestly think that an equal opportunity global corporate feudalism is a utopia. Nothing wrong with that. After all, with no borders and only symbolic nation states, you can chase from sweatshop job to sweatshop job all over the world. The opportunities will be endless (just the outcomes will be the same….). Now you won’t get many to agree, but hey, you won’t know until you propose it in an honest fashion. And if you are not looking forward to that, be careful of who you are making friends with…..

This isn’t a CBCW, but I won’t be commenting much after this...

About that Manufacturing Rebound that Wasn't.....

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Saturday August 06, 2016 · 4:35 AM PDT

2016/08/06 · 04:35

Do you think anyone is pissed about this?

I wrote a diary / blog / whatever a little over a week ago pointing out that after 35 years of stable employment, the US shed over 5 million jobs in manufacturing, or about 1/3 of its total. This was the main graph I referenced:

I pointed out that the job losses are real and devastating to the communities they happen in, and they occured after NAFTA was passed. The blog was met with a high level of dismissiveness, much more than I expected. The usual reply was that there was a ‘wave of efficiency’ that resulted in the job losses, and that the impact of outsourcing was otherwise minimal. Others pointed out that it wasn’t until China was admitted to the WTO that the job losses hit. I’m not sure how / why that changes anything — if people are pissed about trade agreements leading to job losses, pointing out that they went to China not Mexico doesn’t change much. Besides, it was Bill Clinton who signed NAFTA, and everyone remembers that. Screwing around with TPP should be poison. But, many people seemed to differ.

But, there was one chart that was referenced in the comments that I have to admit threw me for a loop. It is Real Manufacturing Output from the St. Louis Fed:

As you can see, manufacturing output bounded back! See, everything is great! All those people at Trump rallies complaining about closed mills and closed plants are simply inevitable victims of efficiency. Output at or near all-time highs, 1/3 less people, more efficient!

Except, not. The good news, or sad news, is that after a whopping ten minutes of poking around the fed data, I traced the data to the BLS, and the efficiency myth is just that, a myth. Here is the thing, if you read the notes its not too hard to figure out that Real Manufacturing Output is just that — the value of the output of manufacturing. To see what is really going on, you have to look at the inputs. So check this out:

This chart plots real manufacturing output and all of its components. It isn’t inflation adjusted, so it rises sharper than the prior version, but we can work with it. If you look at the chart, all of the components trended similarly to the total. Then, right around 2000 (i.e. the same time that employment took a dive), one of the components broke from the pack and was clearly driving the total. And that component is (drum-roll please): Materials!

It is pretty clear from the shape of the ‘Materials’ line that it is now driving the total. In fact, if you subtract materials from the total, you get this:

Take out the cost of materials, and you get a different picture. You see growth until 2000, then a decline in the Net (‘Real Manufacturing Output’ minus ‘Materials’). Real Manufacturing Output continues to rise because it only focuses on output value. If the price of steel skyrockets, real output increases. If a cabinet maker stops manufacturing panels and instead only finish-assembles pre-cut boards shipped in from overseas, real output still rises. In both cases, stagnation or decline in activity is masked by increase in price of the final product. Metrics for economic activity developed 30 years ago no longer work. So, sorry to bust any bubbles, but manufacturing hasn’t rebounded and that ‘wave of efficiency and automation’ was little more than a bakery firing all of its workers and leaving a skeletal staff to write “Happy Birthday” on cakes shipped in from overseas.

Will TPP Cost 5 Million Manufacturing Jobs Like NAFTA Did?

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Monday July 25, 2016 · 2:25 PM PDT

2016/07/25 · 14:25

But manufacturing has always been declining! At least that is how the story goes. Proof usually looks something like this:

Manufacturing as a Percent of Total Employment

As you can see, steady downward trend means manufacturing has been declining. No impact from NAFTA, so what is the big deal?

Or maybe you see a graph that looks like this:

People get hired & fired all the time! What’s the big deal? These graphs are nice because they either bury what has been happening in manufacturing within the context of the larger economy, or they just present a bunch of meaningless fuzz. But to get a simple answer, just ask a simple question: How many people were employed in manufacturing before NAFTA, and how many after? Well, if you go by totals, it peaked in 1979 at 19.4M and hit 12.3M last year. So the peak was well before NAFTA, and the valley well after NAFTA. Again, it looks like no big deal. But, if you throw it all on a graph, you get a different story:

There is alot of information in this graph. Yes, manufacturing peaked in 1979, but overall it was pretty stable at 16-18M jobs for 35 years. Then NAFTA hit. Jobs didn’t drop immediately when NAFTA was passed as it was politically risky at the time to move production out of the US. It also takes alot of time to move massive production facilities. But eventually it became passe to pack up and ship out, and ship out they did.

I threw the import quotas from the 80s on the graph. Everyone knows they didn’t work, except for the fact that they did. Foreign imports were rapidly eating into the market share of the Big 3 at that time. When the import quotas hit, two things happened: sales from the Big 3 stabilized, and foreign companies started building plants in the US to get around the quotas. Here are Japanese auto companies voluntarily limiting exports into the US in 1988, and here they are in 2012 still talking about them as they build plants and add jobs in the US. To say that the import quotas in the US were ineffective is nonsense.

By the way, when I was looking up information on the import quotas, I saw some old information I didn’t recognize back in the 80s-90s, but now I do.. It is the ‘high cost of jobs saved’. It usually goes something like this:

A 1984 Brookings study estimated that each auto job saved by Japanese voluntary restraints on exports cost Americans $165,000; a later International Trade Commission study upped the estimate to $193,000.

To understand this number, you need to read old automotive annual reports where they talk about the cost of labor being ~$70/hour. No one was actually making that, those numbers are generated by dividing the number of hours of actual work per assembly worker into the entire workforce pay (vacation & sick pay, salaries for non-line workers like electricians and maintenance, etc. etc.). To reference this as the ‘cost of a job saved’ is to assume that for every one job on the line ‘saved’, two more are ‘saved’ elsewhere. But did you catch that? Depending upon who’s buying and selling, jobs are now a drain on the economy. Increasing employment is now a drain! Not to mention that this type of analysis completely discounts that the imports aren’t free, or that money that leaves the country can’t be spent in the local economy but instead has disappeared. But nothing beats a big scary number to generate spite, and boy did people get spiteful. And if you want big scary numbers, check this one out:

The cost per net textile or apparel-related job saved amounts to $4,145,669.

Except, every dollar spent on an item is either profit thrown in the bank, money spent elsewhere (which becomes either salary or profit), or tax revenue. So if there is really $4M+ in extraneous profits per textile job, it seems people would be falling over themselves to open shops. If it is all salaries, then back to ‘the more people we get to fire’ argument. And if it is tariff revenue, well everyone gets to make up the loss in higher taxes. It is a big fun scary number, but have fun following the money. I’m sure it’s right next to the blue unicorn at the end of the rainbow.

So the last question is, who really gained from all of this anyway? Surely NAFTA was an export boom, right? Where is all of this magical growth that NAFTA was supposed to generate? Someone had to make out, didn’t they. Well, here are income charts from the mid-60s to the present. See if you can spot the winner because I can’t. The wealthy kept getting wealthier and everyone else was left behind.

Is NAFTA really worth it? Is this what we expect from TPP? At the rate we are going, we won’t even need TPP. NAFTA is still picking up steam. And one last thing, if you want to know why people are angry, I’ve included a game in the comments.

Question for Michigan Voters

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Sunday November 02, 2014 · 7:06 AM PST

2014/11/02 · 07:06

Dear Michigan voters, I have a question for you: Exactly what did you get out of the Detroit bankruptcy? Snyder's henchmen shook down 22,000 retirees, pillaged the city, and ran up huge tabs. And what did you get out of it? I really want to know, because here is how I see it:

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Friday July 04, 2014 · 4:45 AM PDT

2014/07/04 · 04:45

We all know the story - the American colonists were being increasingly ground down by British rule, so they listed their grievances in the Declaration of Independence and finally rebelled against the tyranny. But do you know the full story? Do you know that there was a perfectly reasonable response from the King of England that any true American would agree with? This letter was lost at sea and only recently recovered. Had it been delivered, the rebellion would have stopped before it had started as any truly reasonable person would have abandoned it's cause. Don't believe me? Well read it and decide for yourself:

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Sunday March 23, 2014 · 5:38 PM PDT

2014/03/23 · 17:38

Note: I published this late on a Sunday. I'm going to beef this up with more examples from the junk-science-site (top item from each heading should be good) and republish.

If someone were to say "Of course weathermen are liars! Have you ever seen a cat or dog fall from the sky?" You would probably take this as an emotional statement, not a statement of fact. Your would assume the other person is commenting on how weathermen like to hype the weather to add drama. You would not assume the person meant this as a literal: that cats and dogs don't fall from the sky, therefore weathermen are liars. The conversation would then get surreal and bizarre if you were forwarded a link to a site debunking 'cats and dogs falling from the sky'. Well, that is where climate deniers are at. Follow below orange squiggle of doom....

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Sunday September 22, 2013 · 8:35 AM PDT

2013/09/22 · 08:35

Here is an interesting example I stumbled upon while browsing the web. I came across SafeBuilt, a company that specializes in outsourcing building inspection departments from local governments. One of their posterboys of success is the city of Troy, Michigan. You may or may not have heard of Troy - they recently recalled their mayor for being an idiot and gained international fame for almost-closing their library. Anyway, if you read some the stats: average household income over $100k, high proportion of college grads, etc, you'd think this was a smart city full of smart people doing smart things....

... surprise over the squiggle ....

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Sunday July 28, 2013 · 9:48 AM PDT

2013/07/28 · 09:48

Update: OK, this was failed in the comments where it has been court-tested and shot down. It does beg the question though: why is MERS continually allowed to skirt property sales tax. The current law has been court-tested and thrown out. It doesn't mean the law cannot be changed to apply to MERS transactions. This is one of the rare opportunities for a State, City, or Municipality to tax Wall Street. The diary was a fail, but the idea (I think) is valid.

Original Diary:

Or a big chunk of it, and this is not snark. All it requires is the full application of an existing law: 1966 PA 134:

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Tuesday October 16, 2012 · 3:35 PM PDT

2012/10/16 · 15:35

Romney says he will lower tax rates and close loopholes. Can it work and be revenue neutral? Yes.... You just need to know the difference between lowering tax rates and lowering taxes. He can easily lower income tax rates by about 8% for everyone. People just had better be careful what they ask for. Follow me through the orange wormhole-of-death and let me show you how it works.

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Tuesday October 16, 2012 · 6:16 AM PDT

2012/10/16 · 06:16

Romney says he will lower tax rates and close loopholes. Can it work? Of course it can. It is actually quite easy, even from a revenue-neutral point of view. He can easily lower taxes paid by about 8% for everyone! Seriously, he can do this! Follow me through the orange wormhole-of-death and let me show you how it works.

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Thursday September 08, 2011 · 6:25 AM PDT

2011/09/08 · 06:25

Bad as it is when accounting runs your life, it is even worse when bad accounting takes over. Read & enjoy…

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Sunday August 21, 2011 · 7:00 PM PDT

2011/08/21 · 19:00

How about a revenue-neutral $300B plus stimulus that also saves social security? Sound crazy? Actually, it is pretty easy. All we need to do is apply some free-market principles to social security. Ok, stop banging your head against your keyboard and jump the squiggly....

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You don't need to understand Those People, but

About that Manufacturing Rebound that Wasn't.....

Will TPP Cost 5 Million Manufacturing Jobs Like NAFTA Did?

Question for Michigan Voters

The letter that could have prevented the Revolutionary War

and weathermen lie, cats and dogs don't fall from the sky...

Anatomy of a Government Outsource

Fail: I just solved Detroit's problem

Romney's Tax Shell Game - How It Will Work

Romney's Tax Plan - How It Can Work

Bad Accounting 101: Beer & Peanuts & Social Security

A Revenue Neutral $300B Stimulus that Saves Social Security....