Gyroscope

A newsletter for those unmoved by spin.
No. 19, December 1, 2003

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Back in July I ran a series of quotes in the No Comment section to the effect that the U.S. economy was not doing as well as people thought. Now, there seems to me more evidence accumulating that a corner has been passed and economic activity is picking up.

The first to argue that growth had resumed had only the rising stock market to point to. That's fine if you live on investment income, all you care about is the stock market. The mere fact that jobs didn't pick up was of no concern.

Then, corporate profits went back up. Again, useful, should encourage businesses to expand, but job growth did not follow.

And some made a virtue out of that. We're in a new era, that of rising productivity. Business can expand but not need new workers. Profits will go up, stock prices go up, just leaving the unemployed without jobs. Great. As long as you aren't looking for a job.

Now, productivity increases are a good thing. The only way in traditional economic theory to justify a wage increase is by increasing productivity. A company where the total revenue divided by the number of employees is $50,000 isn't going to pay as high a wages as one where the revenue per employee is $125,000. Increase your own productivity and you can justify getting a raise.

But, businesses are also getting productivity measures up by taking it out of the hide of workers, pushing them to work longer uncompensated hours, stressing the work place and providing fewer tools to help workers. Since unemployment is high, they can do this as workers fear being unemployed.

There are also areas of the U.S. economy that point to trouble. Rental prices are way off across the U.S, one interesting side effect of the low interest rates that accelerated home ownership. Some of the spending boom propelling the recent pickup is related to people feeling richer by having lower house prices, but that is a one time push for the economy. Interest rates will have to rebound a bit if the economy does pick up, totally freezing home refinancing. State governments are in deep trouble financially and cutting services. The record federal deficits to finance Bush tax cuts for the wealthy and his war on the world also mortgage the future.

And if the economy does improve over the next year, Bush could turn out to be the beneficiary come election time as people forget the pain brought on in part by his economic policies.

Still, hard to find any objections at all to the unemployment rate coming down. As it does, crime will decrease, more people will have health insurance and seek medical help for problems. Retirements can be planned rather than forced. Maybe that has happened at last.

Nicholas Kristof ran a contest to find the best names for the new war. The winners included "Dubya Dubya III" and "Mess in Potamia." Not winning, but favorites of mine included "Tigris by the Tail" and "Desert Storm und Drang." New York Times, Nov. 29, p. A33.

Johns Hopkins Hospital "was recently found to be violating a new rule limiting resident's work weeks to 80 hours and shifts of no more than 24 hours" reports the Washington Monthly, Oct, 2003, p. 6.

"The Next Chapter in Iraq Reconstruction" sings an add in Financial Times in November advertising a conference in Washington DC where you can "Meet Iraqi Ministers", "Develop a sales strategy into Iraq," "Network with 50 person Iraqi Businessman delegation." Break out sessions include "Insurance Issues and Risks," (that should be popular) and "Cultural Strategies." Sponsors include Halliburton, of course.

Canada has a 15% lower standard of living than the U.S. but "many Canadians believe that their public health care, better protection of the environment and lower crime rate make them better off." reports the Economist, Sept, 27, p. 13.

"U.S. taxpayers also support most of the world's government-funded basic biomedical research - as much as 80%, by some estimates," reports Business Week, Oct. 13, p. 38.

Over the past 12 months, stocks are up some 17%. Internet software stocks are up over 134% and Gold Mining stocks are up 91% on the same period. Worst performing groups include Photographic Products and Motorcycles, reports Business Week on their weekly Personal Business page.

"As it is an ancient truth that freedom cannot be legislated into existence, so it is no less obvious that freedom cannot be censored into existence." Dwight D. Eisenhower (popularly attributed)

"Life is a long lesson in humility." - James M. Barrie.

"Love is an exploding cigar we willingly smoke." - Lynda Barry

"Republicans are the party that says government doesn't work, and then they get elected and prove it." - P. J. O'Rourke

"The only difference between the Democrats and the Republicans is that the Democrats allow the poor to be corrupt too." - Oscar Levant. The last four quotes from The Return of the Portable Curmudgeon, Jon Winokur, editor.

The next year, 1943, he was drafted into the army. He fought at the Battle of the Bulge and the famous seizure of the Remagen bridge. He earned a Bronze Star for valor and a Purple Heart for a wound. That's heroism of a different order. Two reasons to remember Warren Spahn. (If you want a third, unrelated to heroism, how about the fact that he hated the designated hitter rule?).