Archive for November, 2006|Monthly archive page

Medical Fact of the Day

Uchitelle, Louis. 2006. “Gilded Paychecks: Lure of Great Wealth Affects Career Choices.” New York Times (27 November).

“Indeed, doctors have become so interested in the business side of medicine that more than 40 medical schools have added, over the last 20 years, an optional fifth year of schooling for those who want to earn an M.B.A. degree as well as an M.D.”

Formula for Disaster

The New York Times discusses the growth of trading financial assets by mathematical formulae. This type of trading can potentially overwhelm markets — something the article does not mention.

Duhigg, Charles. 2006. “A Smarter Computer to Pick Stocks.” New York Times (24 November).

“Studies estimate that a third of all stock trades in the United States were driven by automatic algorithms last year, contributing to an explosion in stock market activity. Between 1995 and 2005, the average daily volume of shares traded on the New York Stock Exchange increased to 1.6 billion from 346 million. But in recent years, as algorithms and traditional quantitative techniques have multiplied, their successes have slowed.”

Dick Cheney, Working Class Radical

I enjoy collecting vignettes about how workers subvert the authority of management. I had not expected to find Richard Bruce Cheney to contribute to my collection, but according to Sy Hersh, he did.

Hersh, Seymour M. 2006. “The Next Act.” The New Yorker (27 November).

“A month before the November elections, Vice-President Dick Cheney was sitting in on a national-security discussion at the Executive Office Building. The talk took a political turn: what if the Democrats won both the Senate and the House? How would that affect policy toward Iran, which is believed to be on the verge of becoming a nuclear power? At that point, according to someone familiar with the discussion, Cheney began reminiscing about his job as a lineman, in the early nineteen-sixties, for a power company in Wyoming. Copper wire was expensive, and the linemen were instructed to return all unused pieces three feet or longer. No one wanted to deal with the paperwork that resulted, Cheney said, so he and his colleagues found a solution: putting “shorteners” on the wire — that is, cutting it into short pieces and tossing the leftovers at the end of the workday.”

What is ironic is that Cheney tells this story to continue his obsessive efforts to shore up the authority of the presidency with respect to international law, Congress, the courts, and mostly ordinary people.

Is the bubble becoming explosive?

Here is what the Wall Street Journal reports.

Ng, Serena, Gregory Zuckerman, and Michael Hudson. 2006. “$60 Billion in Two Days: A Spate of Mergers, Buyouts Announced Across the Globe.” Wall Street Journal (21 November): p. C 1.

“More than $60 billion in deals were consummated in the past 48 hours of frantic merger and buyout activity, not including the debt assumed from target companies in these transactions, according to Dealogic, a research firm. The deals included a $20 billion private-equity bid for real-estate giant Equity Office Properties Trust and stretched from Europe to Canada to the U.S. More than 35 deals were announced globally, leaving bankers looking broadly to other sectors — including health care, technology, gambling and home building — for the next megatransactions.”

“The common denominator now is debt. In the U.S., corporations have sold $109 billion in “high yield,” or junk, bonds and raised an additional $593 billion in junk-rated bank loans so far this year, according to Dealogic. Last year they raised $707 billion in bonds and loans in the U.S.”

“Yet there are signs emerging that large debt loads could begin to weigh on companies involved in the deals. Some of the bonds issued by both HCA and Freescale were “toggle” bonds, which allow the companies to choose between paying interest in cash or in the form of additional bonds. That’s a strategy companies adopt when they worry that they might be short of the cash flow needed to pay off interest in the short term.”

Class Struggle, Blowouts, and the New Media

I spent last weekend at the LaborTech conference, devoted to understanding how labor can adapt modern technology in its struggles against capital. Some of the most impressive examples came from the Korean representatives. Dean Baker also gave a very nice talk.

Now I see a very creative example from the Steelworkers attacking Goodyear in the context of their ongoing strike.

The union produced a very nice advertisement that reached number 24 on Youtube showing how tires made by a replacement workers during the Firestone-Bridgestone strike were responsible for most of the rollovers of the Ford SUVs.

Here is the URL:

Here is a brief extract from my new book manuscript, The Great Capitalist Restoration: Seeds of a Catastrophic Depression:

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Scooter Libby, A Thanksgiving Turkey

I have been travelling & attending conferences. Not much time for the web.

Could Bush declare Libby to be a Thanksgiving turkey & pardon him in the holiday spirit?

On the Death of Milton Friedman

Milton Friedman died today. I never met him personally. The closest I got was overhearing his private conversation at the Western Economic Meetings in 1986. He was gloating that the end of communism would create a massive labor surplus that was sure to bring down wages in the West. He was particularly excited about the effect of China.

Central to Friedman’s thinking was that concepts like fairness — at least a traditional idea of fairness — had no place in economics. What the market produced was by definition fair. Corporations aiming toward profit maximization alone were sure to bring about the best possible outcome.

I just happen to be reading last Friday’s Wall Street Journal science column by Sharon Begley dealing with a sense of fairness in other primates. The article got me to thinking about the arrogance of economics, seeing its ideological mission to create a Friedman-like view of the world. Is economics engaged in some sort of reverse Darwinianism, hell-bent on making the human race into the lowest form of primate?

Anyway, here’s a short extract from the article.

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Advice Rumsfeld Never Heeded

Mann, Jim. 2004. Rise of the Vulcans: The History of Bush’s War Cabinet (NY: Viking).

16: Rumsfeld asked Nixon for career advice: “Nixon also outlined for Rumsfeld which countries and regions of the world would help further the career of an aspiring politician and which wouldn’t. “The only things that matter in the world are Japan and China, Russia and Europe,” Nixon explained. “Latin America doesn’t matter. Long as we’ve been in it, people don’t give one damn about Latin America, Don.  Stay away from Africa too, Nixon warned.  As for the Middle East, he went on people getting involved there carried to many potential hazards for a politician”.”

The Road to Baghdad begins in El Salvador

I have just begun reading Gred Grandin’s book. It looks very valuable. Here are my notes from the first few pages.

Grandin, Greg. 2006. Empire’s Workshop: Latin America, the United States, and the Rise of the New Imperialism (NY: Metropolitan Books).

2: “Washington’s first attempts, in fact, to restructure another country’s economy took place in the developing world-in Mexico in the years after the American Civil War and in Cuba following the Spanish-American War. “We should do for Europe on a large scale,” remarked the u.s. ambassador to England in 1914, “essentially what we did for Cuba on a small scale and thereby usher in a new era of human history.”

3: “From the mid-nineteenth to the early twentieth century, the U.S. military sharpened its fighting skills and developed its modern-day organizational structure largely in constant conflict with Latin America – in its drive west when it occupied Mexico in the mid-nineteenth century and took more than half of that country’s national territory. And in its push south: by 1930, Washington had sent gunboats into Latin American ports over six thousand times, invaded Cuba, Mexico (again), Guatemala, and Honduras, fought protracted guerrilla wars in the Dominican Republic, Nicaragua, and Haiti, annexed Puerto Rico, and taken a piece of Colombia to create both the Panamanian nation and the Panama Canal.”

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A Sour Note

The morning after we read that the Los Angeles Times fired another editor for refusing to cut costs by eliminating much of its reporting, we learn that Gannett intends to rely more on stories from the blogosphere for its newspapers.

I don’t have any news to report to them, but I can tell you that the trends are obvious. We cannot afford investigative reporting. Negative ads and stories lifted from blogs will be good enough. We’re spending too much on medical care. We need to cut back. Ditto for education.

We need more people to work on McMansions, luxury yachts, and other necessities of modern life in which more and more of our wealth and income goes to the very rich, whom we should applaud for being self-sufficient enough to pay for items. The rest of us should be thankful for low prices at Wal-Mart.

Oh yes, there was an election yesterday. Jim Stroub on Doug Henwood’s e-mail list reported that a friend offered the most succinct analysis I have seen. We can be happy that people will cut our throats are gone and now we can work with people who are sure to sell us out.