Saturday, August 29, 2009

Labor omnia vincit

I'd like to propose a "theme" for the coming week.Now let me preface by saying that I normally despise blog "themes". They are usually an excuse for the blogger to trot out some multiply-rejected article he or she is dying to inflict on the innocent reader. Or as a part of some sort of larger blogger sort of "Blog for..."that enables people who can't write their way out of a wet napkin to straphang on to better bloggers. And they're often a substitute for original thinking.

That said, I'd like to suggest the contributors here to think about, and write about, the present conditions of, prospects for, and place in the 21st Century United States (or the setting of their choice) of "labor"; the artisan, laborer and manual worker.

We live in an age where domestic manufacture and industry is declining in importance to a degree unknown since the rise of the United States as an industrial nation. Even the pastoralists among the Founders, who saw their creation as a nation of smallholders and sturdy farmers came to see the importance of domestic manufacture. Thomas Jefferson said in 1816:
"We have experienced what we did not [before] believe: that there exists both profligacy and power enough to exclude us from the field of interchange with other nations; that to be independent for the comforts of life we must fabricate them ourselves. We must now place the manufacturer by the side of the agriculturist... Shall we make our own comforts or go without them at the will of a foreign nation? He, therefore, who is now against domestic manufacture must be for reducing us either to dependence on that foreign nation or to be clothed in skins and to live like wild beasts in dens and caverns. I am not one of these."
It is doubtful that we can ever regain the dominance we owned in the period between 1945-1975 - we cannot hope to benefit from a world war destroying our competitors every generation. But we - the We of We the People - seem willing to allow our domestic labor and industry to slip to a mere shadow of itself in return for a largesse of cheap plastic geegaws from Asia.

Is this inevitable, or to be deplored? Is this irreversible, or merely temporary?

And what are the political, social and economic implications of the decline of Domestic Labor.

I suggest we spend the next week - before "Labor Day", itself an ingenious twist on what in the Old World is "May Day", a celebration of all things working class and Red - exploring the changes that have occurred, are occurring, and may occur, to our own laboring class here at home.


  1. (1 of 2)

    Great topic, Chief, and very timely too for a number of reasons. I'm sorry, but I'm going to be REALLY depressing about it.

    As usual, I've been looking for alternate explanations for today's headlines and testing assertions about what's happening out there and what I've found REALLY impresses me in a very depressing way.

    The official line which has been spouted quite a lot this week is that we should all be grateful because the Federal government has PREVENTED a second Great Depression. This could be true but there's an alternate, more likely scenario for the future.

    The alternate explanation is that we are in another bubble, one funded by government debt and government-approved changes to accounting standards (I'll provide more information if you need it on this point but for now I'll spare you).

    Obama officially came out last week with a Federal deficit of $1.5 trillion; of which roughly $1 trillion dollars went to TARP and the Stimulus plan. Unfortunately, the number doesn't tell the entire story of Federal stimulus. We are also looking at $300 billion in Federal Reserve "quantitative easing," roughly $500 billion in the Federal Reserve's program to keep mortgage rates low, and the Federal Reserve's "lending window" program to offer cash to strapped banks in exchange for lousy assets (I can't find a dollar value on the program, it seems to be a national security issue).

    That's roughly $2 trillion added to a $13.5 trillion economy and is throwing off the official statistics by about 15% (example: The official statistics show that the economy has shrunk by 4% this year. It would show a roughly 19% reduction without all of this federal stimulus money). For comparison, the worst of year of the Great Depression was a 13% reduction. Scared yet?

    Another way in which the Federal government is boosting the economy is by guaranteeing loans. I can't find much hard information on what is being promised to whom or when so the danger from this is very hard to measure. What I do know is that the Congressional Budget Office (the sole semi-accurate government source of statistics) reported last month that since the beginning of the crisis (not officially declared but I'll guess March 2008 with the Bear Stearns collapse) the government had guaranteed $25 TRILLION worth of loans (on a $13.5 trillion a year economy!)

    What loans are being guaranteed? I can't find out; that information is a national security matter.

    But I can make a guess. Last quarter Goldman Sachs reported record profits (which immensely helped the theory that the economy is on the road to recovery). How did they achieve those profits? By selling record quantities of "financial weapons of mass destruction." Given what happened last year, nobody would touch those assets unless they were sure that they wouldn't get burned. Does anybody else smell a government guarantee?

  2. (2 of 2)

    The beauty of the government guarantee is that there is no government financial obligation if the deal doesn't go bad. The horror of the situation is that we can't estimate how much the government is going to owe if things go really bad.

    I've spoken at length with a friend of mine who has some insider information on loans and default rates and we've established that under normal circumstances the government will ultimately be on the hook for between 5% and 40% of the loans. Sorry for the wide spread, but there are too many unknowns because most of these financial instruments are linked to each other like claymore mines. If the government has stopped guaranteeing loans (which we know they haven’t but we don’t know the value of the new loans) the government will add between $650 billion and $10 trillion to the national debt in the next 10 years.

    This brings me to my final point: all things come to an end. At some point the government is going to have to stop spending. The Federal Reserve and the Obama administration have indicated that they are going to slow down their spending in October. What will happen at that point?

    I don’t know but there are several possible scenarios:
    1. The government is right and the economy picks up the slack by itself and everything returns to normal. Given everything described above, this is highly unlikely.
    2. The government is partly right and the economy slides some but eventually recovers. This is the best likely outcome.
    3. The government is not very right and considerable additional stimulus (in the neighborhood of $4 trillion) is needed before the economy recovers.
    4. The government debt bubble is masking the problem entirely and we fall off a cliff when government support is withdrawn. In essence, the government spent tons of money to temporarily hold off the inevitable and probably made it worse at the same time.

    Fortunately my alternate explanation can be tested using the “Cash for Clunkers” program. As you’ll recall, this little government gem more than doubled car sales for August. If the government is right then September auto sales (reported no later than October 5th) will show a decline to normal levels. If I’m right, September auto sales will be very low, less than 100,000 new cars sold.

    To tie this back to the Chief’s excellent question of the near term future of the American worker: What will be their fate?

    If the government is right then we will continue the slow decline that has marked the last 35 years. If I’m right, we might see unofficial unemployment numbers (as measured by hit between 35-40%. I’m not sure which I fear more.

  3. Pluto-

    I will just address "Cash for Clunkers" in this reply. It was never intended to be a "solution" to the auto industry's problems. It had two objectives: 1) inject some incentive money into the new car business that would impact all levels of the industry and 2) raise the fuel efficiency of the overall fleet of cars on the road by getting less efficient cars into the scrap pile.

    As far as objective #2, replacing cars that get 18 mpg or less with cars that get 22 mpg or more is a productive step. 4-9 mpg improvement earned a $3,500 trade-in, and 10 mpg or more improvement got the full $4,500. Note that the incentive is in lieu of any trade-in value, so low value cars were being destroyed.

    The fuel saving benefit will be obviously of longer term than any cash injected into the auto industry, but it would be interesting to see if any other $3 billion program has made an equally immediate impact on fuel efficiency. Some 700,000 clunkers were taken off the road by this program.


  4. Now back to the "laboring class". My doctoral field was labor market theory, and even back in 1976-82, it was starting to show trend lines that were depressing.

    The early exploitation of the working class was "owning" them. Creating a dependence on the company that kept folks toiling on the payroll for life. Through about 1980, this grew into a form of paternalism. Make the job a womb (pension plans, job security, health insurance, etc) and people will be tempted to stick around.

    Modern trends have made labor, to include some very high skilled jobs, a disposable item. Employers may say they want to care for their employees, yet the trend is towards outsourcing. For example, our daughter in law is an individual contractor to a Fortune 500 contractor that is providing contract software development services to another Fortune 500 firm. 50% of the team she works with are individual contractors, and in order to get their contracts, they must agree to be forbidden to accept permanent employment with either of the two Fortune 500's in the mix for two years after their current contracts expire!

    More and more skilled labor is falling into the same labor conditions as flipping burgers, albeit at higher hourly rates of pay. Education, seniority, experience or age no longer predict wages as strongly as before. Hours worked times the prevailing wage are the predictors. Contractors are often retained only to pick up special projects or surges, thus leaving many workers with unpredictable hours over the long haul.

    The change in the structure of the labor market has nothing to with "the economy". It is a result of businesses learning ways to place the responsibility for the well being of those producing for them more and more at arm's length. Hell, we have even contracted out significant elements of warfighting!

    The labor market structure is a cultural issue, and not a pretty reflection of our culture at that.


  5. Manufacturing output has not appreciably declined in this country since the end of WWII. What's happened is that productivity and population have increased, resulting in a decrease of manufacturing employment. This isn't even a recent phenomenon and the decline has been steady since the end of WWII. The actual number of manufacturing jobs has stayed relatively stable - in essence we are producing more with fewer people.

    It's also important to point out that domestic manufacturing still supplies about 80% of domestic demand. While this number has declined over the past couple of decades (and acknowledging that we need to try to reverse the trend), US manufacturing isn't as bad as it's often made out to be.

    I think the comparison to agriculture is a strong one and I would expect manufacturing employment (separate from manufacturing output) to continue to decline. I don't think there's anything the US can do about it, and steps to "save" manufacturing jobs will be as fruitless as steps that were made to "save" the agricultural sector at the beginning of the 20th century, some of which continue today. The auto industry is a case-in-point.

    The difference with agriculture, however, is that we are a net exporter of agricultural goods, but a net importer of manufactured goods. That to me is a much bigger problem than manufacturing employment. Even if we doubled our manufacturing output, manufacturing employment levels would still be far below historical highs. So, what can be done when productivity and population are increasing? It seems to me that both cannot increase forever while maintaining full employment.

    If you look at China, that is a significant problem they are facing. China is actually in recession if their GDP growth falls below about 7%. A 7% growth rate creates just enough employment to keep even with population increases. Any less than that and they lose ground.

    What's the solution? I have no idea. As one of Al's posts recently noted, private sector job growth is essentially flat. If that trend continues we will have a country where an increasing smaller private sector finances an increasingly large government workforce. That doesn't sound like a good long-term outcome to me even as my family is a direct beneficiary of this system as we're both paid (directly or indirectly) from government coffers.

    Employment in new areas is the other alternative. "Services" fills that role and has for a long time now. I have no idea if it will continue or if something new will come along. What I don't think is possible is significantly increasing manufacturing employment, just as it's not possible to significantly increase agricultural employment.

    Then there's the factor of oil prices. The reason foreign-manufactured goods are competitive in the US is not only due to cheaper labor, but also cheap transportation costs. Cheap oil = cheap transport costs.

    As anecdotal evidence, and as I've mentioned before, I have relatives in the US steel industry. When oil was so expensive last year, the steel industry was booming because the cost of imported steel went through the roof. This year is a very bad one - quite the opposite. So if the "peak oil" people are right, then domestic production will become comparatively cheaper over time.


    IMO, "cash for clunkers" was a waste of money. Dave Schuler, one of my favorite bloggers, makes the case here.

  6. Andy

    Do the numbers at an average of 10,000 mi/year applied to 700,000 getting let's say 6 mpg better fuel economy from cars that were already pretty much in the inventory. That's 97 million gallons of gasoline consumption less per year. While that is only 1/4 of one day's average consumption, it is still a reduction, and one that will continue for the life of the cars and the fleet.

    I've seen all the arguments against promotion of energy saving machines that consume energy to be manufactured. Still, public policy should continue to be one that enforces greater and greater energy efficiency in new products. Cash for Clunkers is the first step we have taken to destroy autos of lesser fuel efficiency. That's a significant policy shift, and a good one in light of the unsold inventory used to replace the Clunkers.


  7. I haven't organized my thoughts yet, so I'm going to weigh in now and then come back later. BTW, Chief, great idea, great topic.

    WRT Cash for Clunkers, I agree with Andy. I frankly think it was a noxious idea from a president and Congress that are beginning to smell like three-day-old fish. In addition to the arguments in the blog to which Andy linked, something that really irks me is that po' folk, the ones who need the help the most, get screwed on two counts. First, where are they going to get the $$ to buy a new car? And secondly, where are they going to be able to get an older used car to replace their current clunker? The used car market has taken a huge hit.

    I'm as much in favor of all of the feel-good environmental stuff as the next guy, but don't we hose our poor enough already? Cash for Clunkers is just another program to help those who don't need the help. To me, it ranks with the outrageous bank handouts, something for which I'll never forgive Obama.

    More random "Clunker" thoughts. Why didn't the law specify that new vehicles had to be made in the U.S.? That way, American workers would get the benefit of the stimulus spending. Such a caveat might still have resulted in Toyota being the biggest beneficiary, but note lots of Toyotas are made by Americans. So are Hondas, BMWs, etc. In fact, one might actually be helping one's fellow Americans MORE by buying certain foreign models than by buying GM or Ford. Don't be surprised if your new "American" car is made by Mexicans or Canadians.

    "Clunkers" will result in individual households taking on even more debt: installment payments on a depreciating asset are never a good idea; given the size of the average American family's debt load together with the uncertain nature of the employment market, I don't think the government should be encouraging and in fact subsidizing such debt. Not at this time. Bad debt is bad debt. Car payments are bad debt.

    Pluto really opened the can of worms with his excellent comments. I frankly don't think the nation will ever recover; Americans are going to have to get used to a diminished standard of living. We and the Western European nations are going to go the way of Russia, maybe even politically. And China and India won't replace us at the top of the heap: they'll eventually rank with us, but not at the heights we attained. Those days are gone forever.

    What's infuriating to me as an American is that the Euros and the Japanese at least tried to stave off what now seems almost inevitable. They saved, they tried what we called "protectionist" measures, they limited immigration, and they avoided stupid wars. We never even tried. Our habit of electing stupid and venal leaders doomed us: they and their rich cronies used us like a $2 hooker. It's no wonder we caught the clap. And a long-dead Frenchman saw it all coming. We think we're so smart? We're the stupidest ones on the plant. Had it all and gave it away. I'm using the past tense here: we ain't coming back and we need to come to grips with that.

    I doubt there will be any democracies in 100 years. The outlook for the human race is grim.

  8. Al -
    My comment about the "Cash for Clunkers" program being a good litmus test for the economy works in a slightly different way than you envisioned.

    In theory a recovery occurs when two things have occurred:
    1. Debts have been sufficiently paid down to free up cash
    2. Pent up demand (caused by people paying down debts instead of buying stuff) has built up to the point where people are more interested in buying new stuff than in paying down debts.

    The government's theory is that the overall population has more cash, less debt, and an ability to buy.

    I don't agree. The American consumer is still debt-strapped and isn't interested ready to spend yet. So the "Cash for Clunkers" program, instead of kick-starting the buying cycle, only dragged potential buyers forward a few months and the next few months auto sales will be dismal as a result.

    I also agree with Andy about the "Cash for Clunkers" program. It's great that we reduced fuel consumption by 97 million gallons per year but we paid $30.93 per gallon to do it. At the current price for fuel it will take over 12 years to hit break-even. Short analysis: A reasonably worthwhile goal but the program was too expensive.

    Andy -
    I've heard the same information you quoted abou the Chinese government needing 7% growth to avoid a Recession but I don't know how they arrived at that number. The Chinese work force isn't growing by 7% per year, it's growing by less than 1% per year and will soon start shrinking (the Chinese One Child rule went into effect in 1979) soon the larger older generation will start retiring and the work force will start shrinking. Any idea on what's behind the 7% number?

    Publius is right that we are going to inevitably see a declining US standard of living and the Indians and especially the Chinese are going to get dragged down with us. The only two logical ways out of the government debt trap are serious inflation (10+% per year) or default.

    I really hate the idea of inflation, I saw what it did in the 1970's and would hate to do that trip again, especially with the Boomers on the edge of retiring to fixed incomes. Default causes other, larger, more interesting problems.

    Publius -
    I have to disagree your prediction on the long-term fate of humanity. We're in a devilishly stupid period of history but that's nothing new.

    We're learning our lessons, probably fast enough to avoid extinction, and at some point we'll stop being quite so stupid and move it up to the next level and everything will look fresh and new again. The trick is surviving relatively intact until the Renaissance comes again...

  9. Pluto,

    The way it was explained to me is that China needs that level of growth not only for natural population growth, but also rural-to-urban migration. Apparently, and I don't really understand this fully, less than 7% growth would mean an increase in urban unemployment - not a real recession, but a problem nonetheless. IOW, they can't sustain job growth without that level of economic growth.


    I can think of a lot better things to spend those billions on than cash-4-clunkers if environmentalism was the real goal. Frankly, I think the program was just a political bone thrown to the auto industry, and one that wasn't very tasty or filling.

    As to what the future holds, I honestly don't know. For my children's sake, if nothing else, I will remain cautiously optimistic.

  10. Pluto, I wasn't forecasting extinction or anything approaching that. When I say I don't believe there will be democracies in 100 years, that's pretty grim in my book. We Americans are busily proving that self-government doesn't work, at least not in our nation where no one seemingly wants to make even the slightest concession or contribution to his/her fellow citizens or the future. The Euros are a little better—at least they show more interest in politics—but I don't see how the cradle-to-grave welfare state can survive in the long term.

    I think we'll get a man on horseback before we, in Pluto's words, "stop being quite so stupid." George Bush was just a trial run.

    And WRT to the Indians and Chinese, I didn't intend to suggest that they would be "dragged down with us." They are so far behind us that virtually anything is an improvement. What I meant to convey was my belief that there actually will be a leveling effect, with wealthy nations becoming poorer, and poor nations becoming wealthier. In other words, a world of mediocrity, of "C" nations, rather than the current Bell curve. Maybe that would be better. Who knows?

  11. For those who despair at the big picture, I offer this
    little picture.

    Where there is life, there is hope. But is there life?

  12. One of my greatest concerns about the decline of manufacturing labor is NOT economic. Our economy has already been mortgaged to the financial industry; more and more of our domestic economic and manufacturing decisions will be made not to further the long-term interest of the manufacturer or the manufacturer's labor force, but for the short-term interest of the investor and the financiers. Whether that will be beneficial for our domestic industry we will see.

    No, it is the loss of political and moral independence consequent to becoming a cubicle-rat, wage-slave and burger-jockey. Mark Twain said, in an essay called "corn-pone opinions" that if you told him where a man got his corn-pone he could tell you what his opinions were. Al talks about the proliferation of "independent contractors"; my wife is an "independent contractor" and never was a phrase less descriptive. She is utterly dependent - dependent on her contractee for her livelihood in a precarious and utterly whimsical way, dependent on me (a "traditional" employee) for her health care.

    Andy talks about the decline of employment in agriculture. That was almost inevitable, what with the mechanization of farming, and yet, the corporatization of farming and the rise of the immense agribusiness was not, and has been almost entirely the result of our unwillingness to enforce antitrust legislation on corporate farming. The consequence of THAT had been the rise of incredibly cheap food and a national food export powerhouse...combined with appalling environmental practices, dangerous genetic depletion of foodstock plants and animals and the almost total loss of our "farmer" as a political factor beyond a gluttonous procurer of subsidies.

    Likewise the stagnation of jobs and wages for high school grads, and now even lower college grads. These people are not going to be political risk takers. Their entire lives have been ruled by fear: fear of unemployment, fear of poverty, fear of the unknown...ruled by OTHERS, in short.

    The Tree of Liberty is not watered by such as these.

    I'm afraid that Publius is right: we are not breeding a nation of republicans, but a nation of Republicans...

  13. Chief,

    When are employees not dependent upon employers? Hasn't it always been that way? Cubicle-rat, wage-slave, and burger-jockey make great polemic, but they don't tell me much. Loss of political and moral independence? What does that mean, exactly?

  14. Andy, compared to the 1945-1973 situation, where the picture was a lot different for many, and progress was the norm.

  15. "Progress was the norm." Ok, what exactly does that mean?

  16. All busineses seek to follow the agri model. Even high-skill employees have become commoditized as the cycle of change accelerates.

    Social Darwinists think that employees should just keep evolving every 2-5 years, changing skills or jobs and whatever the human and societal long-term costs on the cog are irrelevant. People should just adapt, and Mr. Smith's invisible hand will guide they way.

    This country needs a new creative class, to be given all the benefits that megacorps have. Anyone willing to quit their job and start a company today should have subsidized healthcare coverage for 3 years and the pool of SBA loans should flow as readily as those getting TARP funds.

  17. Publius:

    I am with you when you say, "We Americans are busily proving that self-government doesn't work". We are moving towards a Great Leveling and a world of "C nations". In Mr. Bush's (and his brother, Jeb's) own small way, the NCLB initiative has helped to lay in the mindset which will pave the way for this.

    I'm not so sure about Pluto's coming "renaissance", even being the cautious optimist that I am :) I see too much to the contrary.

    To Chief's concern of "loss of political and moral independence consequent to becoming a cubicle-rat, wage-slave and burger-jockey", I share in that concern. Even beyond the actual poor of Ehrenreich's Nickle and Dimed, people are generally in thrall to something outside of themselves, leading to their lack of independence, moral or otherwise.

    srv mentions the "creative class" -- are any of you familiar with Richard Florida's work, "The Rise of the Creative Class"? It offers a blueprint for a hopeful new and inclusive societal paradigm. (Something we do not do with programs like Cash for Clunkers, a sop to the auto industry which, as Publius points out, does not reach to those truly in need.)

    Florida says we need a new "Creative Compact -- a Creative Economy analog to the graet societal compacts of the 1930's, 40's and 50's which expanded and accelerated the Industrial Economy and led to the great golden-age of prosperity." It is an inclusive vision which brings industrial and service workers on board.

    You can read more of his thinking here:

    [If anyone can teach this Luddite how to embed links, i'd be much obliged :)]

  18. As chief mentions, "independent" contractors are very dependent. More seriously, they are self-employed people, doing what full employees once did. Being self employed puts all the burdens of health insurance and social security, to mention just two issues, on the independent contractor's back. And, most independent contractors are not eligible for unemployment benefits when their contracts are terminated.

    With people hungry for work, many people accept "independent contractor" status with conditions that do not meet the legal standards of such contracts. Microsoft was a classic practitioner of this.

    So, with more and more of the working folks falling into the self-employed category, more and more people are cut off from the traditional social benefits previously part and parcel to employment.

    It ain't a pretty picture

  19. Publius -- your link didn't work :(

  20. Call me a Luddite also. My golden age was as a boy in the late 40s and a teen in the 50s.

    My father was a trucker, Uncle Willy a machinist, Uncle Dick a railroad yard worker and occasional brakeman, Uncle Mac a city bus driver. Only Uncle Alan broke the blue collar mold as a salesman. Yet I and my cousins all lived like the sons and daughters of rich men - we could have been princes and princesses if you will.

    I never thought much about it when I served in the military, as my family and I always lived well and even better perhaps than some civilian neighbors. But after 22 years and then retirement my eyes opened. After a year or so I moved into a high paying job in aerospace, probably making more per month (on paper) than my father made in a year - and we were working concurrently. Plus I was double dipping pulling in a military pension. But it seemed I was never able to provide as well as my father did. And the wife worked too. My mother and Aunts had worked during the war but never after the war.

    Until the last child left the nest and finished school my bride and I were always in debt to the credit card companies. Never could figure out why specifically. Buying power had eroded, housing and food costs had exploded. Interest rates I know were usurious compared to what they were in the 40s and 50s. But what were the underlying reasons for all this? I blame a number of things including consumerism, the Reagan revolution, th military-industrial complex (that I was working in), overspending by Uncle Sam, etc. But most of all even though I worked in management positions I believe the blame lays in the lbel and defamation of labor unions in this country which led to their being effectively gutted.

  21. This is a fine (if sad) discussion but there's a large section of the problem that you aren't considering.

    It isn't just employees that are suffering. Companies are getting squeezed by a combination of ruthless competition and extremely high profit expectations on the part of the shareholders. The companies are passing the buck down to the employees because that's one of the few things they have under their control.

    A couple of years ago I faced a moral dilemma; the company I work for was having a very tough year, we were getting kicked around by the competition and other circumstances that weren't under our control. Our senior management came up with a solution that everybody seemed to like except me. The idea was that we'd automate the slowest (and most manpower intensive) parts of our business process.

    I was impressed with the brilliance of the idea but was concerned to note that as much as 10% of the employees of the company would no longer be needed. I was selected to be one of the key people on the project because I knew a lot about the tasks that would be replaced by a machine.

    What to do? The company was getting badly beaten up and we might well have to had lay off the employees anyway. But I wasn't enthused about being part of a project that would probably make people's lives worse.

    Eventually I chatted with the CEO, who is a really stand-up guy, and he assured me that he'd do everything in his power to transfer and retrain as many of the affected employees as possible.

    So I went ahead and helped write the monster and saw it through testing and deployment. Then a very nice thing happened: all of our bad luck went away and we started winning contracts unexpectedly and were running at full speed. The CEO held to his promise (made much easier by all the work we had to do) and only a couple of people were laid off and solely because they refused to be cross-trained.

    Within a year our software product was the defacto standard and we were in the right place at the right time and were doing very well while the competition was scrambling. That didn't last long, of course, and the shoe swung back the other way.

    All of these businesses keep trying to offer better, cheaper, faster services to our client. This is great for the client but is increasingly hard on both our managers (who are continually asked to do more with less) and our employees (who are lately becoming ever fewer).

    Corporate competition is slowly becoming a death-match between starving, mad-eyed creatures that can barely think because they are so desperate.

    I'm fortunate that my company is very well led and doing better than most but it's likely that we're in for more pay-cuts and lay-offs for Christmas.

  22. Independent contractor. Yeah, I was one of them for a lot of years. Still am, for that matter, because old friends insist on keeping me on the books. In what I do—or used to do—that's important because it keeps the security clearance alive. Guess I'm in the bullpen, although I don't expect or really want to get back in the game. My whole approach to this is my catch-all word: "Whatever," meaning that if somebody wants to pay me American money to look at a problem and devise some sort of a solution, whore that I am, I'll do it so long as it fits into my overall life style. It would involve the U.S. Government and it would be in Washington, D.C. I've already refused some permanent things, but I'd go on a TDY basis. It is my country after all. I already talk to people for free.

    I agree wholeheartedly with what the Chief and Al have said about the trap of self-employment. "Independent contractors" are not ordinarily anything of the sort. Not only do they have to scratch to make a living, medical care always looms large in their lives. This is one reason why I've felt Obama's healthcare initiative was so important; the nature of employment is shifting and more and more talented people are going to be self-employed. And this is why I'm so disgusted with how Obama has gone about the whole thing.

    My self-employment was always different, for three reasons. First, I was retired military and in addition to my retirement pay, I had two hole cards—Tricare and VA—which meant medical care wasn't an issue. Further, my wife is a nurse who only really got back into it after the kid was gone, and she had the good fortune to do it in California, where nursing salaries increased dramatically in the 90s. Plus of course, through her work we had medical care. Finally, my one kid had graduated college and had embarked on her own professional career, meaning a major drain on the finances was gone. And, good luck for us, that drain has never come back: the kid has done very well: I gave her a few thousand at XMas last year and she quite seriously told me she didn't need it and she wasn't sure if we should be doing that in our declining years. She's a great kid. But she did cash the check.

    Unlike Mike, whose career trajectory is similar to mine, I didn't live like a prince as a kid. And I live a lot better than my parents ever did. My wife does far better than her parents. Yes, everything is far more expensive now, but it seems we've been fortunate enough to catch the wave right. My parents lived better than theirs, and they lived long enough to be happy that I had surpassed them. My daughter is doing far better at her age than we were, and we're just pleased as can be, especially since we're acutely aware that she lives in a 401K world and will not get that nice check each month.

    The American dream. So far, my family has kind of followed that. It's not been without sacrifice—both my old man and I (and a whole passle of uncles) did the combat thing—but this nation has been good to us.

    My family and millions of others have had a great run, with a lot of sweat, sacrifice and playing by the rules going into that. The problem we have is how to keep it going. If we're going to be honest about it, I think a lot of us might suspect that many of our fellow Americans might not have wanted it as much. What I fear is happening now is that our youth may never do as well, but not because they don't work hard and play by the rules, but because the deck has been totally stacked against them.

    I want our youth to be better than us. I also want them to work their asses off to do so. I'm troubled because I think a lot of them may not be willing to do the hard work. I'm even more troubled when I think that even the ones willing to work hard won't be rewarded. If that's the case, and there are no rewards for playing by the rules, no one will work hard. And the nation will go into the dumper.

  23. Andy: You deserve and answer and I'm not ignoring you - I want to frame it in a separate post. Give me a day or two and I'll get back to you with why I think that the conversion from small farmer to agribusiness and from artisan and mechanic to cube-rat and contractor is helping to take an axe to the root of the Liberty Tree.

  24. Chief,

    Great! I look forward to it!