[CLUE-Talk] Re: A Call to Action

[jccann at attbi.com]

> On Mon, Jul 15, 2002 at 05:36:49PM -0600, Jeffery Cann 
wrote:
> > >
> > > What country are you living in? Must be a 
different one from where I
> > > live. I'm not talking about utopian fantasies, I'm 
talking about a
> > > response to a major economic crisis, which in my 
opinion is just getting
> > > started.  
> > 
> > One other thing -- why do you believe that we are 
beginning a major economic 
> > crisis?  You have said this a few times in your 
posts to this thread.
> 
> Once again you're playing fast and loose with my 
words. 

I cut-n-pasted the quote from your post.  I was wrong 
about the number of times you referred to an economic 
crisis (I re-read the thread).

> I've said exactly once that I think the crisis is just 
getting started. 
> As for there being a crisis, I had no idea that was a 
controversial 
> statement.
> But maybe it is.

Certainly I think whether we are in an economic crisis 
is an important part of the debate.

> > If yes, please give me some facts and figures to 
support it so 
> > I can learn more about your point of view and decide 
whether I agree with it.
> 
> Okay, that I can do.
> 
> FACTS:
> 
>   U.S. unemployment rate for June: 5.9%; the May 
figure of 5.8% was the
>     highest in eight years.

It's been higher.  For example, in 1982, it surpassed 
10%.  In the 1930s, it was 25%.  My point -- 5.9% sounds 
like a lot unless you consider that since 1970 the 
average U.S. unemployment rate is 5%.  
 + http://www.infoplease.com/ce6/bus/A0850018.html

>   Dow-Jones Average, 7/15 close: 8,639
>       * international stock markets are declining as 
well
>         
<http://www.businessweek.com/magazine/content/02_29/b3792
139.htm>

This is not a cause for alarm and interestingly the 
Federal Reserve choose not to lower interest rates.  In 
fact, Chairman Greenspan called the U.S. 
economy 'resilient'.
 + http://story.news.yahoo.com/news?
tmpl=story&ncid=578&e=3&cid=578&u=/nm/20020716/ts_nm/econ
omy_fed_dc_4

>   Companies convicted or under investigation for 
accounting fraud and
>   other unethical practices:
>       Enron, Arther Andersen, Global Crossing, Tyco, 
Merrill Lynch,
>       WorldCom, ImClone, Qwest ...

Actually, on CNBC last night, I learned there are only 
18 large companies under investigation by the SEC.  11 
of those are / were clients of Arthur Anderson.  How 
many other companies are not under investication?  Our 
friend the Convicted Monopolist (MSFT) has not yet come 
under the spectre of accounting fraud.  Neither has 
Oracle, IBM, RHAT, etc.

I am not trying to downplay this problem of 
questionable / illegal accounting.  You may remember 
that I work for Standard & Poor's -- a financial 
institution.  We have an interest in the preservation of 
honest accounting practices because we analyze their 
reported data in order to standardize it for our 
customers.

> 
> ANECDOTES:
> 
>   An awful lot of skilled people are persistently out 
of work (do the
>   names Jed and Warren ring a bell?)

What do you think is the root cause of this problem?  I 
know it is not the people because they are highly 
skilled and intelligent.

I wonder if the so called 'dot com' era, referred to by 
Alan Greenspan as a period of 'irrational exhuberance' 
in the stock markets caused an artificial shortage in IT 
labor.  This shortage was caused by the insatiable 
demand for technology at the expense of common sense and 
good business judgement.  The shortage drove up our 
salaries, which is nice if you sill have one.  However, 
now that the money is gone the tech spending has 
declined.  The result is that the artificial shortage of 
IT labor is also gone.  Now, jobs are scarce in our 
field and many intelligent and skilled folks cannot 
break through.

>   Major employers are moving jobs with abandon to low-
wage countries:
>   Quark, Qwest ...

Corporations exist to make money for their 
shareholders.  They have and will continue to cut jobs 
to save money and reach or maintain profitability.  This 
is the cruel reality of corporations.  Well, it's cruel 
if your downsized but if you're a shareholder it's not.  
Corporations do not exist to provide jobs, they exist 
(and have a legal / fudiciary responsibility) to pay 
their shareholders.  We, as workers for such 
corporations, are simple pawns to be thrown away when 
the going gets tough.

>   Job listings on Monster.com, Dice.com, etc. are few 
and far between.

I agree.  Again, I wonder the cause of this problem?

>   Tech recruiters do nothing but whine about the lack 
of business.

ibid.

>   Retail stores can't move their goods (I've been 
moonlighting, if you
>   can call it that, for a company that does retail 
inventories, so I
>   have exposure to their grapevine).

According to most economic indicators, consumer spending 
(and confidence) remains high.

>   Iraq is evil and we need to bring about for 
a "regime change," despite
>   the opposition of most of the world, including--AHEM-
-Saudi Arabia and
>   other OPEC countries. That's OPEC, O-P-E-C, as in 
the 1973 oil
>   crisis--and back then they were just playing. Okay, 
so maybe Bush is
>   bluffing. But I wouldn't bet on it. Some people said 
he was bluffing
>   last September when he threatened to invade 
Afghanistan.

Well, we agree here because the entire Iraq 'issue' is 
totally without merit.
 
> But consider: do you think we've seen the last of the 
accounting
> scandals? 

I doubt we have seen the end of it.  But IMHO, this is 
the way of the world.  Restrictions were loosened during 
the Clinton administration and companies took advantage 
of it.  Now they (and we the pawns) are paying by 
extension.  The U.S. Government will respond with a 
tightening of restrictions and things will turn around.

> I hope you're right, but I suspect (mainly based on my
> personal observations of business ethics, or lack 
thereof, in the 3
> years since I came back from Japan) that the companies 
we've all heard
> about are just the tip of the iceberg.

As they say - timing is everything.  You returned at the 
end of an ugly era in U.S. history. 

> Do you think Bush is really going to crack down on 
corporate evildoers?
> I'll believe that when he fires Harvey Pitt. 

I think the Administration's hands (Bush & Cheney) have 
been caught in the cookie jar with respect to 
questionabe accounting practices.  I think Bush will not 
win another term.  He has shown little savvy in 
responding our compliaints.  I think the November mid-
term election will give G.W. a wake-up call.  I didn't 
vote for Bush because my rule to pick a President is 
that he has to be smarter than me (Clinton didn't make 
it either, BTW).

> Do you think war will be good for the economy? I 
wouldn't bet on that.

I don't think you are asserting that I advocate war 
because I have not and would not ever.  In fact, I am a 
registered conscientious objector to war.

> This isn't the 60s, and war production is likely to 
employ many fewer
> people than it used to. 

Unfortunately, some economists purport that the only 
known cure for a Great Depression is a war.  To me, it 
is questionable claim of cause-and-effect.  Of course, 
we are far, far away from 25% global unemployment rate, 
so any claim that a war with Iraq would 'be good for the 
economy' is simply misguided.

> So that's a large part of the basis for my views. But 
you know, I didn't
> start out with the intention of converting anybody to 
my point of view.
> I got into this debate against my better judgment 
because I found Mazi
> Farhang's post earlier today unbearably smug. You at 
least are making an
> honest attempt to engage with the ideas I'm presenting.

I am curious and I read more of your frea links about 
LETS.  I'll likely have more questions because my bias 
comes from many economics classes in college.  Some of 
the ideas about LETS oppose traditional ideas about 
money as a model for scarcity.  However, I reserve the 
right to be ignorant until I learn more about it :-p.

> In any case, my purpose was and is to organize those 
for whom the system
> is not working--and I meet a lot of them--to work on 
human-scaled,
> locally-based solutions. If you've got a better idea, 
let's hear it.

I don't disagree that there are problems with our 
economic system.  As I said in an earlier post -- humans 
are imperfect so any human system will also be 
imperfect.  

IMHO, there are also more basic problems such as hunger 
and homelessness.  Want to do something?  Work at a soup-
kitchen.  I did for about 6 months.  I served Thursday 
evening meals in a Catholic church on 6th avenue to 
folks who really need help.  Many of us cannot relate to 
their life situations and are fearful of their plights.  
Too fearful to do anything.  Some folks cannot handle 
working at a soup kitchen because it is painful to see 
your fellow human in a bad place.  However, after 
experiencing it, I have a more positive outlook on media-
hyped economic crises.

Other ideas:

1. Teach reading to illiterate adults.  They will become 
empowered.
2. Join a coalition that works for economic reform.
3. Volunteer at your children's school.
4. Pray.  Not a popular idea among in today's cynical / 
literal world, but there's a reason my email name 
is 'fabian' -- St Fabian is the Patron Saint of peace.  
Something always in short supply.

Later. 
BTW - I will take to the FREA group any LETS questions I 
may have.

Jeff