Category - Economics: USA

We Can’t Let John Deere Destroy the Very Idea of Ownership

Wired, By Kyle Wiens, April 21

It’s official: John Deere and General Motors want to eviscerate the notion of ownership. Sure, we pay for their vehicles. But we don’t own them. Not according to their corporate lawyers, anyway.

In a particularly spectacular display of corporate delusion, John Deere—the world’s largest agricultural machinery maker —told the Copyright Office that farmers don’t own their tractors. Because computer code snakes through the DNA of modern tractors, farmers receive “an implied license for the life of the vehicle to operate the vehicle.”

It’s John Deere’s tractor, folks. You’re just driving it.

Several manufacturers recently submitted similar comments to the Copyright Office under an inquiry into the Digital Millennium Copyright Act. DMCA is a vast 1998 copyright law that (among other things) governs the blurry line between software and hardware. The Copyright Office, after reading the comments and holding a hearing, will decide in July which high-tech devices we can modify, hack, and repair—and decide whether John Deere’s twisted vision of ownership will become a reality.

[…]

General Motors told the Copyright Office that proponents of copyright reform mistakenly “conflate ownership of a vehicle with ownership of the underlying computer software in a vehicle.” But I’d bet most Americans make the same conflation—and Joe Sixpack might be surprised to learn GM owns a giant chunk of the Chevy sitting in his driveway.

The Trans-Pacific Partnership: Toward Absolutist Capitalism

Naked Capitalism, By Lambert Strether, April 20

There are many excellent arguments against the Trans-Pacific Partnership (TPP), two of which — local zoning over-rides, and loss of national sovereignty — I’ll briefly review as stepping stones to the main topic of the post: Absolutist Capitalism, for which I make two claims:

1) The TPP implies a form of absolute rule, a tyranny as James Madison would have understood the term, and

2) The TPP enshrines capitalization as a principle of jurisprudence.

Zoning over-rides and lost of national sovereignty may seem controversial to the political class, but these two last points may seem controversial even to NC readers. However, I hope to show both points follow easily from the arguments with which we are already familiar. Both flow from the Investor-State Dispute Settlement (ISDS) mechanism, of which I will now give two examples. more

MoJo Explicator: Here’s What You Need to Know About the Trade Deal Dividing the Left

Three Charts Explain the Student Loan Mess

Bloomberg Business, By Noah Smith, April 17

Here are three charts about student loans that have me worried. First, the total amount of student loans in the U.S. has risen steadily, doubling just since the financial crisis:

This is troubling, although by now it’s a story that most people know. But what fewer people realize is that the federal government has rapidly taken over almost the entire student-loan market since the crisis. Federally owned student loans rose from zero in the mid-1990s, to a bit more than $100 billion on the eve of the crisis, to about $850 billion in late 2014:

…Student debt now comprises 45 percent of federally owned financial assets. Oy!

Leading House Democrat Will Oppose TPP Fast Track

The Nation, By George Zornick, April 14

As legislation to fast-track congressional approval of the Trans-Pacific Partnership gets ready to finally make its debut in Congress this week, a top Democratic member of the House announced he would oppose the bill.

Representative Chris Van Hollen, the ranking member of the House Budget Committee, wrote in a letter to Representative Sandy Levin, the ranking member of the House Ways & Means Committee, that he would oppose fast-track authority, also known as Trade Promotion Authority or TPA. The letter was obtained by The Nation and its authenticity was confirmed by an aide to Van Hollen.

Van Hollen opposed a previous iteration of fast-track legislation last year, as did most other top Democrats, including Minority Leader Nancy Pelosi. But so far, many of those Democrats (including Van Hollen) had not yet announced a position on the new TPA legislation being hammered out by Senators Ron Wyden, Orrin Hatch, and Representative Paul Ryan. (Levin opted out of those talks, and believes Congress should see at least the outline of a trade deal before taking up legislation to fast-track its approval.) Pelosi still remains publicly undecided.

If Van Hollen—a visible member of the Democratic caucus and ranking member of a major committee—ultimately supported the Wyden-Hatch-Ryan bill, it would have been a signal that House Democrats were ready to go along with the Obama administration’s trade agenda. But in his letter, Van Hollen wrote “it is clear that many [of my concerns] will not be included in a revised TPA.”

Hullabaloo: “Fast Track” For TPP To Be Introduced This Week
Down With Tyranny!: A Vote in April on Fast Track & TPP?

Is the future of America a crummy service job stamping on a human face, forever?

Vox, By Dylan Matthews, April 10

Rand Paul and Hillary Clinton don’t agree on much, but they both strongly believe more Americans should be working in low-wage, unpleasant jobs.

Paul devoted a large chunk of his announcement speech Tuesday to celebrating the “dignity of work,” endorsing the notion that work is a force that gives us meaning, rather than a means by which to stay alive. “Self-esteem can’t be given; it must be earned,” he declared. “Work is not punishment; work is the reward.”

Clinton is less blunt, but her campaign is expected to place a heavy emphasis on policies to get women into the workforce and encourage two-earner families, such as child care subsidies or paid parental leave.

The implication is clear: there are people, particularly women, who aren’t working but should be, and the government should be doing all it can to push them to take jobs.

These ideas address real problems: the labor market is rife with gender inequities, and efforts to make the choice to work as viable for women as it is for men are admirable and necessary. So are programs to help people living in concentrated poverty with little or no connection to the formal labor market find employment. And the US still needs to create 4 million jobs to fully recover from the recession.

But while there are problems to be solved, there’s also a reality to be acknowledged. America is a very, very rich society. The richest the world has ever known. For many Americans — particularly Americans with children — working a low-wage, physical job with little job security and unpredictable hours is a deeply unpleasant way to spend your life. Maybe more work isn’t always the answer.


Econospeak: UBI Caritas (the best things in life are free)

The miraculous Max Sawicky resumes wrestling with Universal Basic Income at MaxSpeak. This time the incitement comes from Dylan Matthews at Vox, who argues that a secondary benefit of basic income would be that “it enables a transition to a world of less work and greater leisure.”

That would indeed be a good thing. But as the Sandwichman pointed out two weeks ago, advocates for basic income seemingly make exactly the opposite argument. Guy Standing, co-president of the Basic Income Earth Network, cited a recent experiment in India — and earlier experiments in North America and Europe — as evidence for the claim that a basic income guarantee “would not reduce labor supply… The simple fact is that people with basic security work harder and more productively, not less.”

[…]

In my view, that only addresses one side of “the need”. The other side is the need to reduce superfluous production and consumption. We have long since passed the point where capital “diminishes labour time in the necessary form so as to increase it in the superfluous form; hence posits the superfluous in growing measure as a condition – question of life or death – for the necessary.”

Currently, world-wide carbon emissions per year are roughly double what can be re-absorbed by oceans and plants. This is not to say that the re-absorption by oceans is harmless –it leads to acidification. But clearly more than half of the emissions are superfluous to sustainability. Lo and behold, carbon emission increase in virtual lockstep with hours of work. In the U.S., the correlation between the two has been about 95% over the last quarter century.

… but who decides what’s superfluous?


Max Speak, You Listen!: Work makes Fritos

The Obama Arms Bazaar

Counterpunch, By William D. Hartung, April 3-5

With the end of the Obama presidency just around the corner, discussions of his administration’s foreign policy legacy are already well under way. But one central element of that policy has received little attention: the Obama administration’s dramatic acceleration of U.S. weapons exports.

The numbers are astonishing. In President Obama’s first five years in office, new agreements under the Pentagon’s Foreign Military Sales (FMS) program—the largest channel for U.S. arms exports—totaled over $169 billion. After adjusting for inflation, the volume of major deals concluded by the Obama administration in its first five years exceeds the amount approved by the Bush administration in its full eight years in office by nearly $30 billion. That also means that the Obama administration has approved more arms sales than any U.S. administration since World War II.
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It’s illegal to prevent workers from talking about wages. T-Mobile did it anyway.

A judge has thrown out large sections of T-Mobile’s employee handbook for having a chilling effect on union organizing.

Washington Post, By Lydia DePillis, March 19

Carolina Figueroa works at a T-Mobile call center in Albuquerque, N.M., in the bilingual retention section, trying to talk Spanish-speaking customers out of canceling their accounts. She likes her job, and the pay is decent — $18.50 an hour after eight years working there, plus health coverage, which covers the bills for her and her young daughter.

There’s only one problem: the employee handbook, which covers some 40,000 employees across the country. As long as she’s worked there, workers at the call center have been discouraged from discussing wages and working conditions, through provisions that bar things like disclosure of employee information, making disparaging statements about the company and pursuing wage complaints through anyone other than human resources. Employees can be disciplined or fired for violating any of the rules.
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Trillion Dollar Fraudsters

New York Times, By Paul Krugman, March 20

By now it’s a Republican Party tradition: Every year the party produces a budget that allegedly slashes deficits, but which turns out to contain a trillion-dollar “magic asterisk” — a line that promises huge spending cuts and/or revenue increases, but without explaining where the money is supposed to come from.

But the just-released budgets from the House and Senate majorities break new ground. Each contains not one but two trillion-dollar magic asterisks: one on spending, one on revenue. And that’s actually an understatement. If either budget were to become law, it would leave the federal government several trillion dollars deeper in debt than claimed, and that’s just in the first decade.
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Class and the Classroom

How Elite Universities Are Hurting America

Foreign Affairs, By George Scialabba, March / April 2015

One of the most fruitful ideas to emerge from twentieth-century social theory is Max Weber’s notion of the “iron cage” of purposive rationality. Weber argued that once some principle of organization—market competition, say, or ideological orthodoxy—has achieved dominance in the spheres of production and governance, the rest of a society’s institutions find themselves gradually but inexorably adopting the same principle. In an ideology-dominant society, everything fluid turns to stone; in a market-dominant society, everything solid melts into air.

Not everything, of course. The iron cage is, like most other useful theoretical notions, an ideal type. All societies retain protected (or neglected) spaces where not-yet-rationalized traditions and communities flourish. Still, although the mills of rationalization turn slowly, they grind exceedingly fine. In time, Weber believed, every practice or institution in a modern society, regardless of its original purpose, experiences an irresistible pressure to adapt to the society’s fundamental organizing principle.

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JPMorgan Chase & Co. To Start Charging Large Customers Deposit Fees

Reports suggest JP Morgan will initiate charges on certain deposits

Bidness, Etc., By Larry Darrell, February 24

The largest bank in the US in terms of assets, JP Morgan Chase & Co., is likely to start charging large customers on deposits and is making holding money costly for clients, reports the Wall Street Journal.

The move is an attempt to reduce the effect on deposits that are affected by billions of dollars and is said to bring the number down in 2015. It is the recent in a series of discussions by big banks to discourage certain deposits by corporate clients that are attracted by the low interest rates and new regulations.

Sources privy to the matter said that the memo in place cites new rules that will not affect retail clients. However, some financial firms and corporate clients might be charged higher fees. It is reported that JP Morgan will unveil the bank’s strategy with investors on Tuesday.

“We are adapting to a changing regulatory environment across our company,” Wall Street Journal quotes the JP Morgan memo sent on Monday.

Wall Street Journal [paywalled]: J.P. Morgan to Start Charging Big Clients Fees on Some Deposits

U.S. Oil Workers’ Union Expands Biggest Plant Strike Since 1980

Bloomberg, by Lynn Doan & Barbara Powell, February 21

The United Steelworkers, which represents 30,000 U.S. oil workers, called on four more plants to join the biggest strike since 1980 as talks dragged on with Royal Dutch Shell Plc, negotiating a labor contract for oil companies.

The USW, with members at more than 200 refineries, fuel terminals, pipelines and chemical plants across the U.S., asked workers late Friday at Motiva Enterprises LLC’s Port Arthur refinery in Texas, the nation’s largest, to join a nationwide walkout on Saturday, and issued notices for three other plants to go on strike in 24 hours.

This brings the work stoppage — which began on Feb. 1 at nine sites from California to Texas and expanded to two BP Plc refineries in the Midwest a week later — to 12 refineries and 3 other facilities. The union has rejected seven contract offers from Shell, which is representing companies including Exxon Mobil Corp. and Chevron Corp.

An agreement would end a strike at U.S. plants that account for almost 20 percent of the country’s refining capacity. It’s the first national walkout of U.S. oil workers since 1980, when a work stoppage lasted three months. The USW represents workers at plants that together account for 64 percent of U.S. fuel output.

Previously: US oil workers on largest national strike since 1980

US oil workers on largest national strike since 1980

US union leaders have launched a large-scale strike at nine refineries after failing to agree on a new national contract with major oil companies.

BBC, February 1

It marks the first nationwide walkout since 1980 and impacts plants that together account for more than 10% of US refining capacity.

The United Steelworkers Union (USW) began the strike on Sunday, after their current contract expired and no deal was reached despite five proposals.

The USW said it “had no choice”.

“This industry is the richest in the world and can afford to make the changes we offered in bargaining,” USW International Vice President of Administration Tom Conway said in a statement.


Reuters: Workers strike for second day at nine U.S. oil, chemical plants

China’s Louisiana Purchase: Who’s building a methanol plant on the bayou?

Al Jazeera investigates ties between Louisiana and the Chinese government in a proposed $1.85 billion methanol plant.

Al Jazeera, By Massoud Hayoun, January 26

This article is part one of a three-part series on China’s role in redeveloping southern Louisiana called China’s Louisiana Purchase.

St. James Parish, LA — A prominent Chinese tycoon and politician — whose natural gas company has a dubious environmental and labor rights record that recently started coming under fire in the Chinese press — is parking assets in a multibillion dollar methanol plant in a Louisiana town. And he appears to be doing it with help from the administration of likely GOP 2016 presidential ticket contender Louisiana Gov. Bobby Jindal.

Not many locals in a predominantly black neighborhood of St. James Parish — halfway between New Orleans and Baton Rouge — know that Wang Jinshu, the Communist Party Secretary for the northeastern Chinese village of Yuhuang and a former delegate to the National People’s Congress, is the man at the helm of a $1.85 billion methanol plant to be built in their town over the next two years with a $9.5 million incentive package from the state. The details of the project are unclear, residents say, largely because they were not told about the project until local officials, amid discussions with state officials and Chinese diplomats, decided to move forward with the project in July 2014.

“We never had a town hall meeting pretending to get our opinion prior to them doing it,” said Lawrence “Palo” Ambrose, a 74-year-old black Vietnam War veteran who works at a nearby church. “They didn’t make us part of the discussion.”

The Cartel: How BP Got Insider Tips Through a Secret Chat Room

Bloomberg, By Liam Vaughan, December 29

Halfway down a muddy, secluded road on marshland in suburban Essex sits Wharf Pool, a lake stocked with some of the biggest freshwater fish you will ever see.

A white sign with red lettering reads: “Private Syndicate: Strictly Members Only.” A metal gate, a barbed-wire fence and two CCTV cameras bar the way. Anglers hoping to spend time on the lake’s carefully tended banks must join a waiting list. Those who make it to the top pay a membership fee that buys them the chance to catch a carp that weighs more than a Jack Russell. There are hundreds of them swimming beneath the surface. It’s close to shooting fish in a barrel.

An hour away by train, in London’s financial district, the lake’s owners ply their trade. Wharf Pool was purchased for about 250,000 pounds ($388,000) in 2012 by Richard Usher, the former JPMorgan Chase & Co. (JPM) trader at the center of a global investigation into corruption in the foreign-exchange market, and Andrew White, a currency trader at oil company BP Plc. (BP/)

With revenue of almost $400 billion last year and operations in about 80 countries, BP trades large quantities of currency each day. Traders at the company regularly received valuable information from counterparts at some of the world’s biggest banks — including tips about forthcoming trades, details of confidential client business and discussions of stop-losses, the trigger points for a flurry of buying or selling — according to four traders with direct knowledge of the practice.

Zero Hedge picks up the story: The Rigging Triangle Exposed: The JPMorgan-British Petroleum-Bank Of England Cartel Full Frontal

A New Jersey bid to privatize water without public votes

If approved by Gov. Christie, bill would give municipalities with aging pipes right to sell systems to private companies.

Al Jazeera, by Peter Moskowitz, December 29

A bill that would allow New Jersey municipalities to sell their public water utilities to private, for-profit corporations without putting the measure to voters is awaiting Gov. Chris Christie’s signature.

Until now, any municipality in New Jersey that sought to sell off its water system to a private bidder had to hold a public vote. But a bill passed with bipartisan support by the state’s Senate last week would allow municipalities with aging and deteriorating water systems to put their systems up for sale without holding a referendum.

While supporters of the bill say privatizing water systems could save municipalities money, it allows companies to factor the purchase price of the systems into the rates they charge customers, meaning taxpayers could ultimately be on the hook for the sale of their water systems.

Many New Jersey municipalities have turned to privatization as a way to get quick cash infusions for their deteriorating water systems. According to the Environmental Protection Agency, the state would need $41 billion over the next 20 years to repair its water, stormwater and wastewater systems.

[…]

If the bill is enacted, New Jersey would join several other states, including Illinois, Pennsylvania and California, where ballot measures are not required to sell water systems to private developers.

[…]

But even as more and more New Jersey cities, towns and boroughs turn to privatization, some have resoundingly rejected it. In 2010, Trenton voters rebuffed the sale of their water system 4 to 1. In November hundreds of voters in Sussex Borough also overwhelmingly rejected privatization. Still, Food and Water Watch, a nonprofit group based in Washington, D.C., has said, “New Jersey is one of the most receptive states to water privatization.”

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