Thanks to Barry Ritholtz for posting this (which is current through last Friday); we can see that for severity, our current bear market is unmatched since the Great Depression. Of course, it has a long way to go to be as bad as the bear market from 1929-32 . . . but equally of course, we don’t know how long it has to go. (Click the image to enlarge it.)
HT: Baseball Crank
didn’t, alas, kill the Pelosi-Obama porkathon; but keep an eye on Aaron Schock (R-IL), heir to the congressional seat of Abraham Lincoln and Everett Dirksen, if he keeps this kind of thing up:
Charles Platt, a former senior writer for Wired, went to work at a Wal-Mart in Flagstaff, Arizona and wrote about it for the New York Post. He has some interesting things to say about his experience:
My starting wage was so low (around $7 per hour), a modest increment still didn’t leave me with enough to live on comfortably, but when I looked at the alternatives, many of them were worse. Coworkers assured me that the nearest Target paid its hourly full-timers less than Wal-Mart, while fast-food franchises were at the bottom of everyone’s list.I found myself reaching an inescapable conclusion. Low wages are not a Wal-Mart problem. They are an industry-wide problem, afflicting all unskilled entry-level jobs, and the reason should be obvious.In our free-enterprise system, employees are valued largely in terms of what they can do. This is why teenagers fresh out of high school often go to vocational training institutes to become auto mechanics or electricians. They understand a basic principle that seems to elude social commentators, politicians and union organizers. If you want better pay, you need to learn skills that are in demand.The blunt tools of legislation or union power can force a corporation to pay higher wages, but if employees don’t create an equal amount of additional value, there’s no net gain. All other factors remaining equal, the store will have to charge higher prices for its merchandise, and its competitive position will suffer.This is Economics 101, but no one wants to believe it, because it tells us that a legislative or unionized quick-fix is not going to work in the long term. If you want people to be wealthier, they have to create additional wealth.To my mind, the real scandal is not that a large corporation doesn’t pay people more. The scandal is that so many people have so little economic value. Despite (or because of) a free public school system, millions of teenagers enter the work force without marketable skills. So why would anyone expect them to be well paid?In fact, the deal at Wal-Mart is better than at many other employers. The company states that its regular full-time hourly associates in the US average $10.86 per hour, while the mean hourly wage for retail sales associates in department stores generally is $8.67. The federal minimum wage is $6.55 per hour. Also every Wal-Mart employee gets a 10% store discount, while an additional 4% of wages go into profit-sharing and 401(k) plans. . . .You have to wonder, then, why the store has such a terrible reputation, and I have to tell you that so far as I can determine, trade unions have done most of the mudslinging. Web sites that serve as a source for negative stories are often affiliated with unions. Walmartwatch.com, for instance, is partnered with the Service Employees International Union; Wakeupwalmart.com is entirely owned by United Food and Commercial Workers International Union. For years, now, they’ve campaigned against Wal-Mart, for reasons that may have more to do with money than compassion for the working poor. If more than one million Wal-Mart employees in the United States could be induced to join a union, by my calculation they’d be compelled to pay more than half-billion dollars each year in dues.Anti-growth activists are the other primary source of anti-Wal-Mart sentiment. In the town where I worked, I was told that activists even opposed a new Barnes & Noble because it was “too big.” If they’re offended by a large bookstore, you can imagine how they feel about a discount retailer.The argument, of course, is that smaller enterprises cannot compete. My outlook on this is hardcore: I think that many of the “mom-and-pop” stores so beloved by activists don’t deserve to remain in business. . . .Based on my experience (admittedly, only at one location) I reached a conclusion which is utterly opposed to almost everything ever written about Wal-Mart. I came to regard it as one of the all-time enlightened American employers, right up there with IBM in the 1960s. Wal-Mart is not the enemy. It’s the best friend we could ask for.
What a great coinage. That’s how Robert Reich describes our current economic model, as the bailouts spread:
Put it all together and at this rate, the government—that is, taxpayers—will own much of the housing, auto, and financial sectors of the economy, those sectors that are failing fastest. . . .It’s called Lemon Socialism. Taxpayers support the lemons. Capitalism is reserved for the winners.
Too true. Painfully true, in fact. It’s not the sort of thing one usually hears from liberals (especially under circumstances in which even conservatives have been advocating big government spending), but that only makes his comments all the more important, and the warning they contain all the more urgent.HT: Jennifer Rubin
I think most folks who follow the news are aware that newspapers are in trouble, as stories multiply about the financial problems at papers like the Chicago Tribune, the Minneapolis Star-Tribune, the Seattle Post-Intelligencer, and of course the Grey Lady, the New York Times. Yesterday, Geoff Baker, who covers the Seattle Mariners as the beat writer for the Seattle Times, reflected on this situation on his blog. I think he has some worthwhile things to say; I believe he’s right that online content offers newspapers the opportunity to do far more than they can with their print editions. I particularly appreciate (and agree with) his comment that “the first step is for all reporters who still have jobs to start practising journalism to a far greater degree than they do.” He’s more optimistic than I am about finding a financial model that will work to keep our newspapers afloat, but in the end, I think he’s right that “this Darwinian exercise” will lead not to the extinction of newspapers but to their reinvigoration; we rely too much on the work they do for them to disappear.
A while back, I put up a post riffing on Colossians 2 and asking, “What are the spirits our society accepts as the elemental powers that rule human destiny?” I didn’t have a lot of answers to that question, but the estimable Doug Hagler had a good one: “ECONOMICS.” In support of that, he offered a very interesting point, which hadn’t occurred to me before (emphasis mine):
Everyone treats economics as a science, which in our culture, means a truth-discerning and truth-telling method, when it is in fact a value system of subjective measurement.
I posted again, noting his penetrating observation and interacting with it a little more; and then a little while later, I ran across Kent Van Til’s article in Perspectives titled “Not Too Much Sovereignty for Economics, Please: Abraham Kuyper and Mainstream Economics.” Due to technical difficulties, I didn’t manage to get it posted at the time, and other things intervened. I did want to come back to it, though, because it’s a remarkable piece—particularly when considered in conjunction with Doug’s argument, because Dr. Van Til works with the idea that economists are primarily, not scientists, but storytellers offering an explanatory story of the world. As he notes, the promises they make for their story tend to go beyond what they can actually keep:
In spite of their role as writers of fiction . . . economists pretend to be physicists who deal only with empirical data. They also mainly talk about what has already happened because they aren’t necessarily great predictors—if they were, they’d all be rich.
Dr. Van Til’s analysis is of particular interest when he applies it to rational choice theory, pointing out that people cannot be reduced to “rationality” (and especially to one particular definition of what it means to be rational) and “efficiency.” As he argues, such a reductionistic understanding of human beings can only lead to injustice if left unchallenged; thus it is critically important to see ourselves as more than homo economicus, but with Abraham Kuyper to insist that
economics is not the only sphere of life, nor the only explanatory model of human action. The attempt by one sphere to suppress or dominate all the others must be resisted.
As such, Dr. Van Til writes,
We must urge that humans are more than individuals who rationally satisfy their preferences. We must insist that there really are sins and evils, not merely sub-optimal conditions or disequilibria. We must contend that all goods are not reducible to the one goal of utility. We must contest the notion that the ultimate meaning of the good is only a composite economic good for many individuals. And we must say that all grand narratives are ultimately foolish unless their denouement is found in Christ. That is simply to repeat after our Master that it makes no sense for us to gain the whole world but lose our souls.
You’ve probably seen the report that the porn industry wants a $5 billion bailout (I guess they’re getting hammered by free Internet competition just like the newspaper industry—well, maybe not just like, but it’s the same sort of problem); they’ve even offered to give Congress equity stakes. That’s all we need, Congress helping run the porn industry. We’d never be able to think of a government stimulus package the same way again.
That’s about what Barack Obama is trying to do with his sweeping set of legislative proposals to stimulate the economy, as David Brooks recounts. The problem isn’t content (I think Brooks is right to call this “daring and impressive stuff”); rather,
The problem is overload. . . . His staff will be searching for the White House restrooms, and they will have to make billion-dollar decisions by the hour. He is asking Congress to behave and submit in a way it never has. He has picked policies that are phenomenally hard to implement, let alone in weeks. The conventional advice for presidents is: focus your energies on a few big things. Obama just blew the doors off that one.Maybe Obama can pull this off, but I have my worries. By this time next year, he’ll either be a great president or a broken one.
We knew the President-Elect is a gambler, but this is something else; to be specific, as Jennifer Rubin says, it’s “hubris squared.” If he goes ahead with this, I’ll be rooting for him, but . . . well, Congress will be Congress, and I’m not at all sanguine.
courtesy of Harold Ambler in HuffPo (which is nowhere I would have expected to see global warming called “the biggest whopper ever sold to the public in the history of humankind,” but there you go). He does a nice job of exposing the baloney “science” underlying global-warming claims (including a point about the limited ability CO2 has to absorb heat); perhaps more importantly, he also points out that bowing to global-warming hysteria would misdirect our environmental efforts and do considerable damage to the world economy—which would not only increase human suffering, it would also further damage the global environment by moving the world collectively back toward more primitive, and dirtier, technologies for energy generation.One of my fellow debaters in high school used to say, “I’m pro-environment, but anti-environmentalist.” Issues like this make me think he was right.HT: Bill Roberts
In the latest issue of Forbes, Peter Huber points out the hidden cost of efforts to cut prescription-drug costs: the US is currently the only major market supporting research into new drugs. Government efforts to bring down drug costs will no doubt make existing drugs cheaper; but they will also choke off the flow of new drugs, because the money needed to finance the research and development behind them will no longer be there.This points to the flaw in the reasoning of those who point to Canada and say, “Why can’t we do that? It works for them.” The fact is, their system only works as well as it does because of the US, which helps keep their costs down and their waiting lists more tolerable by treating many of their patients, and because the US’ open market effectively subsidizes their drug costs. It will be interesting to see, if the Democrats get their way and move the American health-care system hard left, what the other unintended consequences are for health care in Canada, and Mexico, and elsewhere in the world. I have a hunch they won’t be pretty.