Steely George

This is a big, important news story that you probably haven’t been keeping tabs on unless you work in heavy industry, either making steel or making things out of steel.

Almost 2 years ago, the Bush Administration approved a hefty tariff on imported steel. This protectionist measure was designed to combat alleged “dumping” of cheap steel by foreign nations. This made American steel more competitive and foreign steel more expensive, at least within the United States.

Like many things, there were unintended consequences. American manufacturer’s costs were driven up because they no longer had access to “cheap” foreign steel. By contrast, overseas competitors were not subject to the American tariffs, allowing them to buy steel for 30% less than American companies could. It does not take a genius to see that foreign manufacturers would be able to make product much more cheaply with such steel. So, although hundreds of thousands of American steel workers’ jobs may have been protected by this measure, the millions of workers who made things out of that steel found their jobs endangered by uncompetitiveness.

As if this were not a serious enough consequence, the World Trade Organization found the tariff illegal. This opened the door for countries harmed by the tariff to impose punitive trade measures, including duties of 100% on some goods exported from the United States to the European Union. It would be polite to say this would not help the American manufacturing sector, which has already shed millions of jobs since 2000.

Repealing this tariff should have been a complete no-brainer. It should not even be an issue today. However, politics got involved. It seems that Bush needs votes from steel producing states to get re-elected. Here is where it gets even more complicated: he also needs votes from states where they make things out of steel.

Just today, the Bush Administration announced that they will do the right thing, abide by international trade law, and dump the anti-dumping tariffs. They will however, keep a “licensing system” designed to prevent “surges” in steel imports. This has already been described as “little more than a fig leaf” for the steel industry.

It will be interesting to see whether there is a new measure which will have the same net effect of the old tariff, or whether the Administration will let bad rules die.

Safety Dance

I am confused.

There is at least one person shooting at cars on an Ohio Interstate freeway. There also may be at least one copycat shooter. There have been 12 reported shootings, and one fatality. This has made national and international news. People are afraid to let their kids play outside at recess, and afraid to let them ride the bus to school. Drivers are doing everything within their meager power to feel safe on the road.

Why doesn’t Ohio have an Orange Alert, or maybe even a Red Alert? Why exactly is this not terrorism? Because nobody has claimed credit and published a list of demands yet? I don’t recall Mohammed Atta’s list of demands. Would it be considered terrorism if a minority neighborhood were targeted? If it happened near Jerusalem instead of near Columbus? What if it were Dearborn?

Speaking of terrorism, I have been informed that if you are planning on bringing Christmas gifts with you when you travel by airplane, do not wrap them. They will have to be unwrapped by the TSA if they are in a bag they decide to search (checked or carry-on). You will need to plan on wrapping gifts at your destination — don’t forget that the scissors need to be in your checked baggage.

How is a wrapped gift in your luggage — in the same plane as you yourself — a greater security risk than a wrapped gift sent by the United States Post Office and placed on a passenger plane? I am not trying to make trouble, I just want to know.

Nobody Ever Got Fired…

… for buying IBM.

Or at least that’s how the saying goes.

Today, IBM announced a radical new sales initiative to actually give customers what they want! More specifically, “the company believes customers want to buy software that is already tailored to their industry, making it cheaper and easier to use.” That means there will be IBM products specifically designed and marketed for various types of businesses. After all, the needs of a Real Estate Management office are very different from the needs of a hospital. As the nice people at Ziff-Davis put it, “For example, many companies in the healthcare industry need to change their computing systems to adhere to privacy regulations, and financial firms need to address new guidelines to process securities transactions.”

There are to be 12 such industry specific divisions and “60 software products tailored to each industrial sector.” These would appear to include their Telecommunications Division and Life Sciences Division. Of course a lot of money is involved, and a lot of people will have their job descsriptions changed. At least they still have jobs.

If there was ever an era of one size fits all computing, it is long since over. There are precious few computer programs that “everybody” needs, like word processors and email clients. Frankly, it’s about time companies like IBM (and Microsoft for that matter) realized that not everybody needs the same things in business software.

What took them so long?

Grey Power

The AARP has spent most of the week trying to convince its members that the newly passed Medicare reform bill is a Good Thing. It isn’t particularly working.

Formerly known as the American Association of Retired Persons, they are certainly no longer just for retirees. Depending how you look at it, the AARP is a massive lobbying organization, a travel discount club, an insurance provider, the second largest membership club in the United States. Less than half of their income is from membership fees.

Oh, you didn’t know they are an insurance provider? They made $161 Million on health insurance alone last year through various partnerships. So it shouldn’t surprise you that they are very much in favor of this Medicare reform: they stand to make a great deal of money on it. The real question is whether they will alienate their 35 million members in the process.

In various cities across the nation, AARP members are expressing their frustration and disgust with this organization that is supposed to present their interests to the nation. They are calling. They are sending e-mail. They are resigning. They are staging protests and burning their membership cards. In short, they are not happy.

Just like the rest of us, the more they learn about this legislation, the less they like it. In fact, it would seem the only good part of this 1000+ page document that has come to light is certain adjustments in the way doctors are reimbursed for care. The bill is full of tax shelters, paperwork, unnecessary “privatization”, complicated deductibles and rules, “incentives” for insurance and drug companies, provisions that actively prevent seniors from getting lower prices, and other frills that really have nothing to do with making sure Granny can afford her medicines. The latter was the whole reason for this mess in the first place, wasn’t it?

The AARP has characterized this reform as good but not perfect. Congress needs to be on notice that “good but not perfect” isn’t good enough. It doesn’t do enough to help elderly people, and it costs a lot of money for us younger folks. This may surprise your Congressmen, but insurance companies don’t vote. You might want to send a little note to remind them.

Thanksgiving Greetings

Since I am not sure how much time I will have for writing this week, allow me to send my Thanksgiving Well-Wishes a little early.

Since this is the season for being appreciative of what you have, please take a moment to consider those who are less fortunate than yourself. Specifically, consider those half million people whose high tech jobs evaporated last year. And the 2.5 to 3 Million people who had jobs in manufacturing at the beginning of the Bush Administration. How many there are seems to depend on whose figures you like. Perhaps you would rather contemplate those Wal-Mart employees who work as many hours as they can and still qualify for government assistance, to say nothing of the people that Wal-Mart has made unemployed. Don’t forget all the people who contributed to the record level of bankruptcies. And the hundreds of thousands of people who file for unemployment benefits for the first time each and every week. And the reservists being called up for full time duty in the United States Armed Forces, spending the holidays away from the people and places they love so they can serve their country.

I have discussed and linked all those things this month. Most of these people tried to do the right thing for their families, and still ended up falling behind. They are not all slackers who made bad decisions and want to be bailed out of the results.

Find some way to make a difference before the end of the month, even if all you do is bring some store brand peanut butter to a canned food drive. Someone will really appreciate it.

My voice is my passport. Or is it my eyes?

There are several things I considered for today’s missive. For one thing, I thought about the fact that the headline “Housing Construction Hits 17 Year High” hides the fact that although housing starts were up 17.7% in the West and up 4.9% in the South, they dived 18% in the Northeast and 8% in the Midwest. Clearly, whether or not there is a lot of new housing going up near you depends on where you live. By extension, whether or not the economy is good enough that people are buying new houses depends on where you live.

Another thing I considered is that both Reuters and the Associated Press felt it important to note that unemployment among high tech types such as engineers and computer programmers is up. Over half a million such jobs vanished last year alone, with another quarter of a million expected this year. These were good paying, skilled, college-degree-required jobs.

Instead, I would like to alert you to a potential boondoggle. Biometrics, at its most simple, is identifying people based on their body: fingerprints; retina scans; voice matching. It has also been hyped as the up and coming thing in security, and is expected to have a $7 Billion market by 2007. US Homeland Security Secretary Tom Ridge is behind it, and is trying to get Europe to join him on the bandwagon. The Chinese think it’s a good idea too. Biometric data will be required in many passports by 2004.

Proponents say it is the best security device ever: no more forgotten passwords; no more forged identification; no more identity theft. But best of all, they say, biometric identification will allow frequent fliers to speed by that long security line at the airport.

That is just not going to happen.

First, experts admit that biometrics have “limited accuracy,” “would not stop people obtaining multiple personas,” and is “only part of the solution.” Indeed, a recent press release admits “Face recognition biometrics is striving to overcome performance inefficiencies and dispel skepticism regarding its ability to meet the demands posed by emerging applications.” In otherwords, they would like to make a product that works. USA Today quotes an expert as saying that “At best, fingerprint scanners are about 98% accurate.” That sounds pretty good until you realize that means it will fail 2% of the time. A minor annoyance if you have a hundred scans a day, a big mess if you have several thousand scans a day. For a tech-centric commentary on this article, click here.

Accuracy is further impaired by many things. Will a voice recognition system recongnize you if you have a cold? Can you use a thumb scanner if you have had an accident and injured your thumb? Will eyedrops effect your retinal scan? Do you dare risk a change in hair color or facial hair if your office uses face recognition? Will you still be recognised in a year, or if something about you changes, or if something around you is different?

As if the accuracy concerns were not enough to declare biometrics a not ready for prime time technology, there are privacy concerns. That same USA Today article says “Biometric systems store huge amounts of personal data. Some systems record the data on a computer inside the store. Others record it on computers at the biometric company’s headquarters. Critics say data will always be at risk.” What can you do if your fingerprint or retina scan is hacked? You can always get a new credit card number or a reissued drivers license number; but you can’t just replace your fingers and eyes.

Linked to but separate from privacy concerns are civil liberties concerns. That stored data in the previous paragraph may be shared with just about anybody, and at this moment there is no law to stop it. Maybe it doesn’t matter that you bought a bag of cat food, but is it really necessary to share that information? And share it with whom? Why? And what about that CIA project to identify people with biometric data at a distance? That isn’t from some bunch of tin-foil hat crackpots, that’s from the Australian Broadcasting Company. How much data about your travels and purchasing habits will end up stored with your biometric-enhanced passport?

And this last question brings us back to the airport security line. Americans want this to work, really. Americans are willing to pay a modest sum and have their privacy invaded for a bit of laminated plastic saying “NOT A TERRORIST” that will speed them past all the security lines. It will not happen. As long as people have luggage, it will need to be inspected. As long as people get on airplanes, they will need to go through metal detectors. As long as people have carry on bags, they will need to be x-rayed. Yesterday’s USA Today cites an expert who “predicts that within a decade or two, the technology will be sophisticated enough to monitor passengers at each step of the airport process — when they arrive, when they check their bags, when they pass through security and when they enter the plane. But he is less optimistic about the technology’s potential for slashing airport waiting times, saying the challenge for airports is to deploy the systems without increasing the wait for passengers.” That’s right. Experts think biometrics may well slow down the airport security lines.

Biometrics is not the end-all answer to identification and security. It is a whole new set of questions. Expensive questions.

What? You mean it isn’t a place to buy a Wall?

Over the last 20 years or so, Wal-Mart has grown from a kind of K-Mart for places too rural to have a K-Mart to the world’s largest retailer. This company, a Dow Jones Industrial Average component, is huge, with $238 Billion in stock, $246 Billion in revenues in the last year, almost $4.5 Billion in the bank, and 1.4 Million employees. And that figure doesn’t even include contractors.

If you go into a Wal-Mart, you will find yourself confronted with goods too cheap to pass up. Why, how can you afford not to shop at Wal-Mart? Where else can you find name brand products at prices this low? How on earth do they manage to make a profit?

Like all deals that sound too good to be true, this one has some ugly stuff under the surface. Stuff so ugly that some people are publicly calling for a boycott of Wal-Mart, and many others make it a practice to avoid the place whenever possible, even if that means paying a little more someplace else. Please consider some of the reasons why:

Wal-Mart reduces the number of small competitive businesses in the communities it serves over time. Smaller competitors, which means all competitors, live in fear of the juggernaut, and continually seek ways to stay afloat. It is hard to compete with a company with a wide array of products, low prices, and a seemingly limitless advertising budget. Don’t let your inner Darwin start talking about how if you can’t compete, you deserve to go out of business. Having a local economy run by one large employer is bad. Furthermore, the businesses that are closing up often can’t compete because they actually pay a living wage and charge a sum of money that allows the business to make a modest profit without pressuring suppliers for special deals. This brings us to my next two points.

Wal-Mart places pricing pressure on its suppliers in a manner that is bad for the economy as a whole. By cutting special deals, sometimes on exclusive products, they effectively undercut certain dumping regulations. These special deals slash supplier profits. Sometimes, the only way for a supplier to make the deal work is to cut costs. Either the quality goes down or the payroll goes down, whether by cutting jobs or cutting wages. Sometimes the manufacturing has to be done overseas, somewhere that wages are so low that it is cost effective to ship the finished product halfway across the world. Even this is sometimes not enough, and financial trouble ensues for the provider. Wal-Mart does not particularly care; the contract to supply them is so lucrative on the surface that companies line up and bend over backwards to get or keep the deal. By the way, this is so far the second way Wal-Mart takes jobs out of the American economy and reduces wages for those jobs that remain.

Wal-Mart pays a poverty level wage to it’s employees — oops, “associates.” And these are the legal employees. This fact is well documented. Pay so low that full-time employees qualify for government assistance — that’s right, people who want to work, people who are working but getting paid so little they get food stamps. And then there are benefits, in the case of those lucky enough to qualify for them. When the paycheck doesn’t even go far enough to buy groceries, even at the Wal-Mart Supercenter, health insurance just seems like an unnecessary luxury. As if that weren’t enough, Wal-Mart is chronically plagued by claims that they discriminate against women, and that they do everything in their power to eliminate “troublemakers,” such as those rapscallions that get injured on the job. Furthermore, Wal-Mart does everything in its power to keep unions out. Whatever you may think of unions, they began to protect workers from abusive employment situations, and by many accounts this is such a situation. We are up to two ways Wal-Mart actively eliminates American jobs, and two ways it keeps working people in poverty.

It is even worse to do contract work for Wal-Mart. By now we have all heard about Federal raids that found illegal immigrants working long hard hours cleaning Wal-Mart stores at night. And of course Wal-Mart executives are shocked — just shocked I tell you — to discover that contractors who assured them would follow all applicable laws would hire illegal immigrants. The Feds aren’t buying that either, by the way. Wal-Mart should consider themselves lucky the various state Attorney Generals haven’t decided to rally around this issue. Forbes has an excellent article on this issue, and why it is more widespread than any of us like to admit. My favorite quotes are on the second page:

Whatever happens in the Wal-Mart case, the abuse of workers will continue until immigration law recognizes that cleaners need labor from abroad and makes the hiring of them legal. “I’ve got documentation for my workers, but now [U.S. Immigration & Customs Enforcement] says their Social Security numbers don’t match, and I have to fire them,” fumes the chief of a big Southeast cleaning contractor. “There are no other workers available. The situation is ludicrous.”

Now let me get this straight, millions of jobs have been lost in the American economy in the last 3 years, and we need to hire foreign labor? “There are no other workers available”? I think he means “no other workers willing to work in the middle of the night for sub-minimum wages and no benefits.”

Emperor in the Buff

It was surely no surprise that the Gross Domestic Product would not “grow” another 7.2 % this quarter. However, picking through the data, there are three things which should give pause to everyone concerning the economy.

First, WalMart and Target both announced that things are not going as well as expected. No, they are not losing money, just not making as much as some people expected. Specifically, they expect the Christmas shopping season to be somewhat less than robust. Now think about it: things are so tight that people are watching how much they spend at WalMart. It isn’t that people are doing more upscale shopping, because Target is seeing below projected sales at Mervyns and Marshall Field. And it isn’t just a problem at Target Corporation because Kohl’s is reporting pretty much the same. Indeed, retail sales in general were down and wholesale prices were up in October.

The second bit of bad news for the economic optimists to explain is the record personal bankruptcies in the 12 months ending September 30.

Remember, the White House would still like to sign legislation making it harder to declare personal bankruptcy. It will still be just fine for corporations to stuff their executives’ pockets with money, fire the lions share of the employees, and drastically reduce their debts through bankruptcy. That’s compassionate conservatism in action.

The final bit of bad news sounds like good news at first. It seems that the Federal Reserve is not considering raising interest rates anytime in the near future, despite admitting that “they can’t remain at 45-year lows indefinitely.” That sounds great, doesn’t it? It’s a huge relief for people with variable rate loans. It’s good news for people who own bonds too, because when rates go up, bond prices go down. However, rates are not going up because, in the words of Greenspan himself, “Uncertainty is not just an important feature of the monetary policy environment, it is the defining characteristic.”

Maybe bad things aren’t happening, but good things aren’t happening either.

Yes, You Do Have to Spell It Out

Today, the Department of Education released it’s mammoth report card on the nation’s schools: the National Assessment of Educational Progress, or NEAP. From the Washington Post: “Administered to a representative sample of students nationwide, the NAEP tests are widely regarded as the most objective and independent assessment of educational progress. While the congressionally mandated test has been in existence since 1969, this is the first year it has been made compulsory for all 50 states under the Bush administration’s No Child Left Behind educational reform measures.”

Reading skills held steady. As for math, the good news is that our students have had solid improvements since 2000, particularly in basic skills. The bad news is that less than a third of the 4th and 8th grade students tested were “proficient” at math.

If you are in a position to hire people who need math skills, this should scare the socks off you.

Needless to say, some states are touting their own scores from this massive document. Some are calling attention to how poor the scores are. Critics call the test flawed inasmuch as students are meeting state criteria but not Federal criteria. And still others point to the fact that the tests were administered to a “representative sample,” not to every student.

The most sensible statement regarding these scores came from middle school teacher and standards writer Betsy Wiens: “Obviously we’re not there yet, but change is not going to be quick. When you change a system, it just takes time.” She is of course correct. It took our schools decades to get where they are today, and it will take years to meaningfully improve them. There is no magic bullet: neither zero-tolerance policies nor school uniforms nor standardized tests nor vouchers nor charter schools nor willy-nilly increases in school expenditures will make kids proficient in reading and math.

We must commit to the idea that schools could be better. We must commit to the idea that getting better means making changes that not everyone will like and that may not be convenient for everyone. We need to commit to abandoning things that do not work, things that do not educate children. We must commit to the fact that learning is more than showing up, that graduation rates have nothing to do with literacy rates. We must commit to the idea that “reform” is more than handing down a set of rules and objectives and then walking away, smug in the trust that such words on paper will magically improve our schools.

We must begin with the fundamental idea that from this day forward, the fundamental purpose of schools, from Grade School to Grad School, will be to educate our children.

Our future depends on it.

Veterans Day

Happy Veterans Day. For my foriegn readers, this is a day when we remember and show respect for the veterans of our armed forces who have served our country. Many schoolchildren, government workers, and some lucky folks in private industry get the day off.

But this year, the parades are scant. The vast majority of our servicemen are too busy defending the country’s interests to march parades in their honor.

Reservists have been called up, and more are being called up to serve full time. These troops are at higher risk of being injured on duty. They leave behind jobs that need to be done and families that need to be fed. Medical personnel are among those whose short term plans are being rewritten by the military. It has been said before but bears repeating: “So much for one weekend a month and two weeks a year.”

These reservists may not even be sufficient. There is loose talk of reinstating the draft. This should be enough to make young men aged 18-26 sit up and vote. Oh, and I did mention medical personnel in the last paragraph: Doctors can be drafted until age 35. In the 2004 elections, will Bush will be so eager to make sure all those no-postmark military absentee votes are counted?

Remember, every young man called up artificially creates a job, making it seem like the economy is in better shape than it really is.

When our troops get to Iraq, they face unknown enemies on every side, aided and abetted by a 70% unemployment rate and contracts with American companies that effectively funnel money out of the country. As I write, 398 American troops have been killed in Iraq, 37 of them in the first week of November. The sobering truth is that we are almost certain to celebrate Thanksgiving knowing over 400 of our soldiers have died in Iraq.

Back home, soldiers’ families face certain grim realities. Even soldiers who get leave might not make it home to see their loved ones. Combat pay may be reduced. Commissaries (low cost on-base stores which make it possible to raise a family on an enlisted man’s salary) are being closed in “remote areas” — places there are few stores to begin with. Schools on military bases risk closure. Apparently the Administration feels “No Child Left Behind” doesn’t apply to the children of the very men who makes their rule possible. Veterans Administration health benefits are underfunded.

Finally, dissent within the military is not tolerated. We are not talking about disobeying legal orders, we are talking about thinking on one’s own time.

Every true Patriot, if you will excuse the pun, should read what Al Gore had to say over the weekend. Agree or disagree as you like. He is not running for any office, and thus has little to gain or lose by saying what he thinks. Or, to use his words, “So, is that fine with everyone?”

Support our troops: pray for peace.