Tag: employment

Wouldn’t that be nice?

Taken at Clark High School in Las Vegas.

In Closing: Foreclosure mess (update, Bank of America has halted all foreclosures nationwide); new 300 year old Vivaldi concerto; progressive agenda; we have to be better; I hope the FDIC bankrupts these [redacted]; always check your work; on Afghanistan; 30% of unemployed have been out of work for at least a year, and the number of jobs in the economy went down last month (no wonder bankruptcies are up); good idea; speaking of food stamps; “none of the above“; new style CPR; sometimes it’s how you say it; and cell phones don’t and can’t cause cancer (“physics shows that it is virtually impossible for cell phones to cause cancer”).

Oh and one more thing! Surf over to Vegas Video Network to see my new show later today!

Education Roundup

This week, there’s been quite a buzz in education. Or perhaps it just seems that way since we have a new Superintendent of Schools in Clark County Nevada.

So lets start with President Obama feeling that part of the problem is that many schools are using outdated textbooks. Has basic reading or math changed recently? Will your child be laughed at for using an outdated form of Algebra? Sure, our understanding of science changes all the time. And foreign languages evolve — Latin excepted. As for history, does it matter inasmuch as they will never get to the last chapter anyway?

The same day, E. D. Hirsch argued that the new educational standards we are trying to formulate won’t amount to a hill of beans without a good curriculum to ensure that kids actually learn it. He’s an expert in both education and cultural literacy with a bibliography longer than my arm, so ignore him at your peril.

One problem with education is that the people who teach the teachers how to teach are failing to address the basics: things like classroom management and how to effectively meet the objectives of reforms like standardized testing. Or, “how to keep a job as a teacher.” In fact,”only 49 percent believe state governments should adopt the ‘same set of standards and give the same tests in math, science, and reading nationwide.'” Sorry professor. Colleges and modern employers expect a high school graduate to know certain things.

In Closing: Rest in Peace Tony Curtis; Happy Birthday Hoover Dam; health insurance changes; it’s not over ’til the crazy lady sings; I’ll have Honda on asphalt with mayo; Erik Scott leads to ch-ch-ch-changes; you can’t have both; on Social Security and Women; Kohl‘s is creating jobs (that’s more like it); why it’s a “bad thing” for household debt to decline (if you are an economist); once more the rich get richer; Dear Ben Stein, stop whining; worker’s health costs to rise 12% next year; and maybe the reason it “seems” that Americans don’t want jobs as migrant farm workers is that they don’t speak Spanish, don’t have “tractor skills” and like coming home to their families every night (certainly a barrier for single parents!). But we would rather pretend that it’s because we uppity high school and college grads are too good for back-breaking labor in an environment where only lip-service is given to labor laws.

The BAMTOR Principle

There’s a story I first heard told some years ago by Cokie Roberts. Perhaps you weren’t aware that both her parents were in the United States House of Representatives. Not at the same time, of course: her father was elected; upon his death her mother was nominated to take his vacated seat, and she was later re-elected several times in her own right. After she had been in the House for a while, she decided that she would like to have a condo in Washington where she could stay while Congress was in session. So she went down to the local bank to apply for a mortgage. She began to question some of the documents that were required of her, and the mortgage officer said they were required by federal law because she was a single woman applying for a mortgage. Rep. Boggs calmly replied something to the effect of “No dear, it’s against a federal law that I helped write!”

The BAMTOR Principle isn’t something that happens when language-challenged super-heroes get mad: it stands for Banks Always Make Their Own Rules. It was true in the mid-70s when Rep. Boggs tried to get a mortgage — how many women simply sighed and handed over the illegally-requested materials? Nothing has changed for the better.

This week GMAC, under it’s new identity as Ally Mortgage, announced that they were halting foreclosures in 23 states. A quick search revealed to me that those 23 states included every state where a foreclosure has to actually go in front of a judge, and many states where they must pass under the Sheriff’s eyes, but no states where it’s a simple matter of a Trustee’s Sale. The obvious conclusion is that their documents will not pass legal muster — but who cares if all you have to do is file papers with the County Recorder and have a sale?? It’s obvious to many observers that they failed to follow the law, in spite of “company policy” that they follow the law, and that this pattern of not giving a **** about the law has persisted for some number of years. Nor are they the only mortgage company with this problem.

Perhaps you’ve heard that Wells Fargo is trying to avoid the responsibility of selling homes they may or may not have the actual right to sell? Most people buy a home assuming that it is theirs and they can sell it to somebody else someday, but that might not be true here; regardless of how many places buyers initial the “bank addendum,” I smell a future lawsuit, particularly when the buyer’s mortgage company gets involved. No wonder banks prefer cash offers.

This brings up another interesting point of law that the banks don’t care to follow:

Now this little problem can be solved by title insurance, right? Well, guess what, some title insurers have exited the business, some others are starting to write policies with meaningful exceptions when they can’t go to the courthouse and find a clear chain of title. Oh, and Wells is trying to steer you towards their title insurer. What do you think the odds are that their title insurance policy doesn’t have exceptions?

A Federal law called RESPA says they can’t actually make you use their title company, but in practice good luck using any other title company. This particular fear is a little overblown because title companies use three standard policies, but the point is taken.

Nor is real estate the only realm where banks ignore the law. Earlier this month, remember that Goldman Scahs decided to graciously close down the proprietary trading unit that the financial services reform bill prohibited. And let’s not forget that back in the 90’s, the Citibank/Traveller’s merger was allowed go ahead most of a year before the actual law allowing such a merger was passed. There was barely a peep from regulators, who assumed that Congress would bend to the bankers’ wills.

When they can’t just outright break federal law without repercussions, they bend it. New rules on bank fees? Let’s just make some new fees!

Nor is it just Federal law that banks choose to ignore; they are perfectly willing to bypass state law as well. Bank of America (and Countrywide before them) has a nasty habit of foreclosing on the wrong house, mostly in Florida. As someone who lives in a neighborhood with a bunch of similar street names and its fair share of foreclosures, I can’t help but wonder if I need a better alarm system. Here in Nevada, we have a number of laws that banks choose to ignore, but since they are “federally regulated” I am told I have to take my complaints directly to the Comptroller of the Currency in Houston. Senator Ensign’s office was particularly condescending about it; if the lady I talked to could have patted me on the head through the phone, she likely would have.

The worst thing about the BAMTOR Principle is that Joe and Jane Average don’t really have a way to enforce good behavior with their wallets. Go ahead and try to open a checking account with a small, local or regional bank; perhaps you haven’t noticed that those smaller banks are disproportionally being shut down by the FDIC and sold to other banks that range from “huge” to “too big to fail.” Assuming you aren’t one of the millions of people who are “underwater” on their mortgage, sure you can get a new mortgage, but you can’t stop that mortgage company from selling your mortgage right back to the company you were trying to avoid!

Go ahead, feds. “Mull new rules.” The Bad Boys of Banking will just find new ways around the ones they don’t like until such time as the feds are willing to take a “tough love” approach, holding bankers responsible — putting people like department managers in jail or fining bankrupting sums of money where appropriate — and breaking up any institution so big that its failure would harm the economy.

In Closing: how abortion protests kill babies; add Michelle Obama and most of the White House Staff to the list of P90X people; where can I get one of these?; Good Samaritan; A question like “How to Lose a Million Jobs” will certainly get your attention; “Super-Rich Get Richer“? Oh good, I know everybody was worried about them; a fascinating read; “luck is not a business model“; more evidence that the insurance companies are doing all they can to subvert “reform“; fewer people working in 36 states, unemployment rises in 27 states, Nevada is still leading the pack; maybe they ought to read what Jesus really said someday; an interesting way of looking at things (h/t Calvin’s Mom); Sharron Angle is only a symptom of the craziness of American Politics; why fiscal stimulus isn’t working; and the Fed is trying to decide if — if! — they need to do more to fix the economy. Well, guys, look at today’s political cartoons and you tell me.

Oh yeah, and happy Autumnal Equinox.

Interest Rates Must Go Up

Just about 5 years ago, I wrote this:

It is my theory that beneath certain levels, low interest rates do not stimulate the economy. There are several factors which combine to this result: First, when rates are very low, there is no incentive for lenders to extend credit to individuals and companies. Since the available rate of return is so low, they would rather take the sure thing on government bonds. Housing lending has continued partly because there is a real asset involved, and partly because such loans can be sold to aggregators such as Fannie Mae. [edit: this was before the housing bubble burst; the last sentence isn’t entirely true any more.]

Second, when interest rates are very low, corporate borrowers — who are supposed to be goaded into action by super low rates — are mindful that the Powers That Be feel the economy is lousy. It is a bad idea to incur debts and invest in infrastructure when the economy is lousy. What will the stockholders say? What cash they do have they will sit on until the moment is right [edit: leaving them in a position to, say, buy out a competitor who imprudently overspent]. After all, if the economy is lousy, they may well need the cash cushion. As for loans, they will wait for some kind of signal that things are improving — an increase in interest rates, maybe — before calling for cash.

Finally, the third leg of the economic table, Joe and Jane Average do not experience added liquidity. While the banks are more than happy to lend them money for concrete things like houses and cars, the banks are reluctant to lend them cash for things that have a lasting impact on the economy. They can’t get cash to start a business (or to help along their existing business) because it’s too risky — for the bank, that is.

Here we are, 5 years later. The Fed Funds Rate has been 0-0.25% for two years. That means banks are able to borrow essentially free money, and have been for two years! Mortgage rates did rise this week, after 12 weeks of declines and record lows, including the lowest rates since this data has been tracked. Under traditional economic theory, all kinds of growth should be stimulated!

So where’s the jobs that should be created by all this stimulation? Oh, right.

The truth is that monetary policy can’t fix what’s really wrong with our economy: banks and businesses we won’t admit are really failing; a workforce that can neither take advantage of job opportunities in other regions nor start small businesses because their houses have lost so much value as to leave them underwater; businesses that pay millions upon millions to executives and stockholders while paying as little as possible to laborers here, overseas, and/or illegal; tax and regulatory policies that encourage bad corporate behavior; a still-broken health insurance system that discourages hiring and will soon force all of us to pay tribute to profitable insurance companies; a failure to manufacture much of anything that somebody somewhere in the world would want.

But it gets worse. Those super low interest rates create one more problem for our economy. It punishes people who are trying to prudently save money for retirement, college, or just a rainy day. A side effect of this is that the Social Security Trust Fund is also getting low rates on their investments — which directly impacts the future of the system and gives future seniors a double-whammy even if they do everything “right.” Further, the low interest rates encourage people (and the government) to borrow money they might have a hard time paying back. While this might boost the economy in the short run, in the long run it’s just a longer bit of rope with which to hang.

Interest rates must rise. Bernanke must stop hiding the fact that some banks are already busted without effectively no-interest loans from the Fed. Institutions that are not solvent or are “too big to fail” must be broken up and turned into organizations that serve their customers. Investors must own up to the fact that their Mortgage Based Securities are worth no more than 70% of the face value and allow homes to be properly valued. Tax code must encourage corporations to spend money instead of hoarding it. And there must be incentives to hiring people here for decent wages, and better yet making something here that can be sold and exported. Let’s stop pretending we can build an economy on cheap credit and lattes.

In Closing: pants; T-shirts; it’s more intellectually honest than Megan’s Law; school reform hasn’t done much for learning; people with a prescription for painkillers might have painkillers in the house; and am I the only person with a tape measure in her bag?

Thoughts for Labor Day

I think it’s appropriate to focus on jobs for Labor Day.

The good news is that employers did add new jobs last month. Unfortunately they didn’t add nearly enough to make a dent in unemployment. Even as private employers are adding positions, cash-strapped state and local governments have had no choice but to cut them. Drowning government in the bathtub sounds great until you realize there’s lots of things government does to make the private sector possible.

The flipside of employment is, of course, unemployment. Real unemployment is much higher than the “headline” number. That’s because the number you hear on the news doesn’t include people who have given up on jobs, people who went back to school because there’s no jobs/to get training/hoping the market will be better when they graduate, part time workers who would rather work full time, etc.. Of course, it’s also alarming how long many of the unemployed have been unemployed.

It doesn’t help matters that the current administration thinks they can create jobs by encouraging companies to borrow money. Banks are still being stingy and real property is no longer something with which truly small businesses can secure loans. Besides, what bank in their right mind is going to lend money to some unemployed guy who figures he can start his own business?

We’re one of the only modern countries with no maternity leave, no mandated sick leave, and no guarantee of health care (merely an upcoming mandate that we pay the profitable insurance companies that created our unaffordable system). We also trail every modern nation when it comes to vacation time. Heck, some people have to fight for their lunch break!

Let’s hear it for Labor this Labor Day.

Acute Angle: Looks like the Review Journal is going to actually sue Sharron Angle for copyright infringement!

In closing: any prison term can turn into a death sentence; why people believe lies; fired for being paid so little she qualifies for food stamps; advice for college freshmen; Enron exec to stay in prison during appeal (good!); this is not good; Thank you, Digby, for saying what I’ve said for years, If Social Security is running out of money, how is less money supposed to fix it??; parents’ worries vs children’s actual risks; Abigail Disney on the Estate Tax; VW wants to be #1; on debt; I wouldn’t treat a dog this way; “Moby Dick with Dragons“; on racism, bad neighborhoods, and the news; and Mac Vs. PC.

Inflation

That’s one expensive yearbook!

In closing: “Maybe we can get Yaphet Kotto to play Captain Picard”; inside Trader Joe’s; a criminally misleading article about what doctors make; investors are nervous; Japanfilter double feature, Space Cruiser Yamato and the truth about Kobe beef; banks still only follow laws that they want to follow; 5 fastest growing occupations (the top two paying jobs reflect a premium for people willing to work the overnight shift); orders for durable goods — things that last longer than a latte — are up a whopping 0.3%; Turn Off Fox; when you start calling the citizenry “a cow with 310 tits [sic]”, you shouldn’t hold down a government position; Direct Instruction is a little more complicated than “nuns in a classroom,” but his point is taken that it in fact works; the smartest thing on unemployment that you’re likely to read this week; “cut government spending… someplace else!”; the next Dalai Lama could be an attractive woman?; you’ve got the time, get out and vote; Righthaven is perfectly willing to go after bloggers, but not a Senate candidate; on American Apparel; mysterious heiress (Clark County, Nevada is named for her father); and finally, The Doctor is In.

The Girl who Played with Shorties

And They Wonder Why the Peasants are Revolting: Even the market news pundits at Marketwatch get it: “In one America, one in 10 of those able to work are unemployed. In the other, Wall Street’s America, bonuses are set to increase.”

Social Security Round Up: I thought about doing a Social Security post, but so many people have already said what needs saying. To whit, most of us have small enough “savings,” “home equity,” and/or “market gains” that we expect to depend at least partly on Social Security (some people depended on it before they even fully appreciated what it was). Social Security needs to be the issue in November, because “saving,” “privatizing,” and all those other words mean nothing more than “destroy.” All those people talking about how “broke” Social Security don’t understand how it works and have an ulterior motive for “reforming” (again, synonym for “destroying”) it. Don’t look at Chile without seeing the whole picture.

Speaking of the Reid vs. Angle race: If this weren’t a race with truly nationwide implications, I wouldn’t spend so much time on elections in an entire state with a population lower than the Dallas-Fort Worth Metroplex. But Senator Reid is the Majority Leader, and Sharron Angle is one of the highest profile teabaggers running. The press is rightfully all over it. Anyway, it’s a tight race.

The Party of Personal Responsibility: Oh! And our other Senator is blaming a “liberal organization” for his woes: namely that he had an adulterous affair and then tried to cover it up by making sure his mistress’s husband was, ahem, taken care of monetarily. Right. ‘Cause his “can’t keep it in his pants” problem? That’s totally the fault of liberals.

Everybody has seen this by now, right?: How dare unemployed people not accept low paying jobs or opportunities that require them to move halfway around the world, ungrateful wretches. Meanwhile, first time unemployment insurance claims are up.

China Knows Better: They know they can’t make do with a Latte Economy. There’s more to a vibrant economy than egg rolls and laundromats. They build stuff, and when they don’t know how to build it they make the West teach them how.

Chuck is Right: Seriously, he’s just a tweak more conservative than I, but this is spot on: “If the number of illegal aliens in this country is something like 20M, you can be real sure that drugs and other criminal activities isn’t what needs addressed. The job picture is what needs [to be] addressed. Enforcement of the pissant employment laws is virtually non-existent, employers know that the chance of getting caught out is tiny and the fines small enough to cover with their illegal hire profits.” Fewer fences, more crackdowns on employers who like workers that don’t stand up for any rights.

They like to call it an “Emergency Department” now: At least there are fewer uninsured people showing up in the ER.

Oh just come out and call Abe Lincoln a damn Liberal: “The genius of Lincoln — and it’s really the greatest historical legacy of the Republican Party — is that all individuals were to be treated based who they are, not who their parents were.” The 14th Amendment is brilliant in its simplicity. It does not need to be repealed, revised, or “interpreted“. Speaking of which, screaming over Anderson Cooper on national television is not a way to be taken seriously.

Priorities: when you think Jimmy Carter outranks Tim McVeigh, the Rosenbergs, John Wilkes Booth, and Benedict Freaking Arnold as worst person in American History, you have some truly messed up ways of thinking. Where’s Lee Harvey Oswald? Oh right, he killed a liberal so that makes him a hero I guess. I’m guessing the criteria included that they be American, which is why Osama and Emperor Hirohito are left out.

This one’s for you, JP: Hal Turner is guilty.

Popularity Counts: Over 25 most popular things. Take it for what it’s worth. I’m glad my car isn’t a “popular” color. I had a devil of a time finding that silver Civic on a parking lot!

I don’t intend to discuss Ground Zero again: Barbara lays it out.

What were they thinking?: No, you can’t legally prevent people from talking to one another at the mall.

Listen up, Ladies: a new “morning after” contraceptive is now approved by the FDA, and is good up to 5 days later.

Things are tough all over: Kroger is expanding their selection of store brand beauty products.

Blame the GOP: So says a Reagan Insider!

Are… Are World Leaders Supposed to Look Like That?: The caption makes the image even stranger.

Oh Sharron.

I hate to waste a lot of space on a Senate race, but this is Harry Reid we are talking about. Since he is the Majority Leader of the Senate, and it is polite to say that our other Senator is “embattled,” this is a big deal.

Senator Reid’s opponent, Sharron Angle, has really been saying some interesting things.

I think the most mind-boggling thing she has said is that the “Reid agenda” violates the First Commandment (that’s Commandment, not Amendment):

And these programs that you mentioned — that Obama has going with Reid and Pelosi pushing them forward — are all entitlement programs built to make government our God. And that’s really what’s happening in this country is a violation of the First Commandment. We have become a country entrenched in idolatry, and that idolatry is the dependency upon our government. We’re supposed to depend upon God for our protection and our provision and for our daily bread, not for our government. And you’ve just identified the real crux of the problem.

Now, for context, she did say this on a Christian radio show. Her comments were intended to reach a very particular audience: one that takes the Bible very literally. Ok, literally except for the keeping Kosher part that is outlined later in the book of Exodus. It would be interesting to know when she last fed the hungry, gave water to the thirsty, clothed the naked, invited in strangers, looked after the sick, or visited those in prison.

But somehow she seems to think — and since this was all said during the primaries, I am inclined to think it’s pretty close to what she does believe — that Social Security Insurance payments, Unemployment Insurance payments, and the like are causing the “half” of all Americans who “aren’t paying taxes” treat the Federal government as a god. Right. Because taxes don’t buy things like roads, which are enjoyed by the rich and the poor alike. And nobody ever pays [attention to the fact that they pay] for Social Security and Unemployment Insurance right out of their paychecks.

Nor is Sharron alone in this strange train of thought. Her communications director just the other day released a statement saying “Only the supreme arrogance of Senator Reid would believe that he has a divine right to rule over mere mortals by ramming through Obamacare, billions in reckless spending, and yes, buying cocaine for monkeys.”

Cocaine for monkeys?? What?? Can we please have a reference on that so we know what the heck he’s talking about?

Sharron also thinks that the Federal government should have no say in what any schools teach, private or public. Does that mean she wants to see an ending for abstinence only sex ed? Well, no. Then what does she mean? The the Feds can’t insist that schools teach reading, writing, and math, or any other set of critical must-know things that employers and communities expect high school graduates to know. Oh, and she thinks your preacher should be able to tell you who to vote for (despite the church’s tax exempt status and the First Amendment). Oh and one more thing, she thinks gays are icky. No, she didn’t really say icky, only that they don’t deserve the protections of law.

But let’s not forget her most recent embarrassing moment, a moment so bad a Fox News reporter laughed:

We needed to have the press be our friend…. We wanted them to ask the questions we want to answer so that they report the news the way we want it to be reported.

Sorry Sharron, Senate candidates don’t get to spin the news whatever way they want it. Ones who want to get elected answer the questions that voters want answered. Maybe Steve Wynn could convince reporters to only ask what he wants to answer, but you can’t.

No wonder Harry’s looking a lot better in the polls than he was mere weeks ago. I sure do hope my neighbors don’t actually elect her!

In closing: On Social Security and Medicare; Is the Fed using phony numbers (why would they switch to the real ones now?); Goldman says “Ok, we’ll follow the law” (how nice of them); Kagan‘s in; new efficiency standards will save you money while helping the environment (and hey, somebody’s gotta build this stuff); on wage cuts (really, only feasible if we have mortgage cuts, but hey); Uh, Mr. President? Employers are doing just fine shipping jobs overseas without your help! (whose side are you on??); a true comic; and a funny baseball card.

Senate Republicans Acting Like Toddlers

Or, Senate Decides its Just Fine to be a Wholly Owned Subsidiary of the Fortune 500 and Special Interests.

Seriously. The Senate voted 57 to 41 on largely party lines to defeat what Harry Reid called “a bill whose principles both parties once supported and that 9 in 10 Americans want us to pass,” despite the fact that none other than the Supreme Court encouraged Congress to clarify the law on required disclosure of political donations.

Color me disgusted. They are in effect saying “NO! I want candy for dinner and you can’t stop me!”

Now don’t get me wrong, I think the disclosure requirements shouldn’t have loopholes for the NRA or unions. Then again, I honestly think you should have to demonstrate that you can actually legally vote for a candidate to give them money! Still, this act was a lot better than nothing. And as for Senator Snowe’s criticism that it was written too fast? How quickly she forgets how fast the mammoth pile of legislation known as the PATRIOT Act was passed. Where were her objections to swift legislative answers to problems then? Oh yeah, buried under a blanket of largely unfounded fear that the terrorists were going to try to get us again any moment now.

Got a Republican Senator? Remember come November.

In Closing: Goldman shows us where the money went; next time somebody talks about how great it would be to gamble invest Social Security money in the stock market, remember these 10 stock market myths from, of all places, the Wall Street Journal; No, I do not want bacon in my martini!; Susie‘s right again; “The Special Inspector General for Iraq Reconstruction says the US Department of Defence is unable to account properly for 96% of the money.”; employees becoming as mercenary as their bosses (no wonder); housing consolidation; “Document Leak May Hurt Efforts to Build War Support” (no really? D’ya think??); open letter to Lindsay Lohan from the ACLU; Angle Update; health insurance and small business; and a pile of big yellow dinosaurs that won’t die.

The Latte Economy

Please bear with me as some issues are simplified for clarity and length.

The American Economy has evolved a lot in the 234 years since the Declaration of Independence. We’ve been an agrarian economy. At times our economy has been driven by various commodities such as gold or steel; in fact, it is still widely thought that Nevada became a state because the Union needed a source of silver (and electoral votes) during the Civil War.

By the end of the 19th century, the ground was laid for the United States to become a real economic superpower. Instead of relying foodstuffs and commodities that were in some ways an accident of being a physically huge nation, worked by a growing workforce with plenty of ambitious immigrants buying into rhetoric of a “land of opportunity”, manufacturing came to the forefront. At the same time, the Gilded Age gave way to the Progressive Age; the standard of living rose for the working class not because the Tycoons were philanthropic, but because workers demanded things like living wages and the 40 hour work week that some of us still enjoy today.

Henry Ford, racist and antisemitic man that he was, did have a flash of genius when he decided to pay workers enough that they could buy his product, and enough time off to enjoy using it. Not only did it increase the number of potential buyers, he found that employee turnover plummeted. Other employers and competitors had to follow suit, and America now had quality finished goods to export.

At some point, “American” manufacturers realized that they could have their products made in countries with lower labor costs, put it on a boat to the United States, and still make more money selling it here, even if they had to discount the price a little bit! They could pull this off at least in part because even if they were paying a wage that was above the local average, it was still cheaper than American labor as they weren’t paying for retirement benefits or health insurance plans, they weren’t paying any payroll taxes or workers comp insurance on those employees, and things like environmental laws or worker protection laws were almost non-existent. To top it all off, desperate third world nations were sometimes willing to make financial incentives to build a factory and create what they saw as jobs of the future. International treaties such as NAFTA sped this process along. The best part of this was that the people at the top made more money, which in turn gave them more power.

But don’t worry about the factories closing, American students were told, you don’t really want to work in a dirty, smelly, dangerous factory all day, do you? No of course not! There is a future for you in information and service! See all these new computers? Somebody has to run them, and write programs in languages like COBOL or FORTRAN for them. Somebody has to figure out where all this information we are creating is, so there will be a need for people like research librarians and file clerks. And hey, worst case scenario, somebody still has to flip burgers and sack groceries.

Of course the problem with a lot of that “information economy” work is that it can even more easily be farmed out overseas. You don’t even have to get a finished product shipped back; just upload it to the server and it doesn’t matter whether it was compiled in San Francisco or Calcutta. Sure there are issues that come up with language and cultural gaps. Oops and I guess they don’t really have even similar data protection laws. But hey, it’s cheap.

And producing cheaper goods and services, we are told, is just the only way they can compete and give us the low low prices the American consumer demands. Of course there’s little talk about the reason the American consumer demands it: his wages just don’t go as far as they used to go.

So we don’t produce very much in the way of goods anymore, very little of the stuff you use every day is “Made in America, even if you wanted to buy American made products you can’t, the only thing we really export is money, at times we don’t even have a trade surplus in foodstuffs anymore, industrialized nations are busy plundering Africa for diamonds and rare minerals, construction is off sharply due to the real estate crash, and even those high-tech information jobs we were promised were the future are really some other country’s future.  That leaves us with what is cheerily called a “service economy,” because “service” is the only thing you can’t do just as well from a thousand miles away.

And some unknown portion of this “service economy” is actually an underground economy of work performed at below minimum wage, with little thought to workplace safety, often by undocumented immigrants who fear deportation if they speak up. Frustratingly, in addition to some “conservatives,” even some “liberals” and “progressives” say we “need” these laborers. After all, they tell us, who do you expect to mow our lawns, pick our produce, and clean our floors, duh.

What does that leave for Americans who want a “living” wage at a legal job? A short list of “opportunities” such as the small number of professions that can’t be done from overseas (e.g., doctor, lawyer, nurse, teacher), selling goods imported from overseas, the grocery business, the hospitality industry, and food service. So I call the “service economy” more of a “latte economy”; at least Starbucks has employee benefits.

The thing is that we can’t really sustain a whole economy on that. We can’t run a country on selling one another lattes and Chinese made shoes forever. To have a vibrant and durable economy, we have to make something tangible that won’t all too soon be gone.

To get out of this economic mess, we must make things in this country that last, that people want, that people can afford, and that people in other nations might conceivably want. Somewhere out there are Americans with ideas about what those could be, but they are stymied by a lack of funding, and a system rigged against production and anyone who wants to play by the rules. But it’s going to take more than some tax breaks; that only helps when a business is profitable enough to owe taxes already. And it’s going to take more than lip service about government contracts; you have to be big enough to complete such a contract before you can get one. It’s going to take a leveling of the playing field so that start-ups can get working capital, develop products, and compete.

The Latte Economy must be replaced by something sustainable if the United States is to continue as a viable country. We can’t continue to export our money forever; at some point we will run out.