Hard-Working Americans

“It takes a lot longer to fly from Chicago to New York or Washington to New York than it did 20 years ago. There's no reason for that. There's plenty of room in the sky.”
— American Airlines CEO Robert Isom on the need to invest in air-traffic control, during an earnings call on Thursday.

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“These are not acts of love or altruism. They are acts of depression and desperation.”
— Donna Cohen, a retired psychiatry professor who has researched murder-suicides affecting older adults

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Trump has issued family tokens for sale. Why would he do that?
President Trump, who has lent his name to everything from steaks and wine to cryptocurrencies, now wants to sell you investment funds.

Trump’s social-media company, Trump Media & Technology , said Thursday that it has applied for trademarks on a series of exchange-traded funds and separately managed accounts. The financial products, which include funds labeled “Made in America” and “Energy Independence,” will launch later this year, Trump Media said.

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The price of a one-day adult pass to Disneyland on the most popular days at the theme park is $206, more than $100 more than the price of admission on the lowest-cost day. Price hikes have moved Disney vacations out of reach for many Americans, alienating parkgoers and worrying executives.

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Hard-Working Americans

Longshoremen won a tentative 61.5 percent pay increase over six years. The Wall Street Journal editorial page notes “the astounding fact” that there are only about 25,000 port jobs, so about half of ILA members do not have to show up for work daily. The rest stay home collecting payments previously negotiated in contracts protecting “jobs” (loosely — very loosely — defined). In 2010, [Harold] Daggett said his members should make more than $400,000 annually. Today, the Journal says, “some now do with overtime.”

Daggett, however, threatened another strike on Jan. 15 unless any additional automation — e.g., automated cranes loading and unloading containers — is banned. Resistance to automation is why no U.S. port ranks among the world’s 50 most efficient. The strike could “cripple” and “crush” (his promises) the nation’s economy before Trump’s promised tariffs do.

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Like his soulmate Trump, Daggett is a 78-year-old child of Queens. His helper with the task of striking the chains from workers’ ankles is ILA’s executive vice president, his son Dennis, who says the ILA “does not support any kind of automation.” “Machines don’t pay taxes,” says the automation-opposing president of the ILA local in Mobile, Alabama. But the more productive the workforce is, the more taxes it pays.

During the three-day October strike, Kamala Harris said, “This strike is about fairness.” But Reason’s Eric Boehm noted two discordant X posts from a progressive, ILA-supporting news outlet. One praised workers for blocking “job-killing automation.” The other lamented that ILA members’ jobs are “backbreaking.--Will

Subsidizing Unproductivity

Boston Bruins defenseman Charlie McAvoy is reportedly in a Boston hospital after sustaining an upper-body injury during a recent 4 Nations game. McAvoy was admitted to Massachusetts General Hospital, according to the Boston Globe.

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The previously unreported operations of the Department of Special Tasks have included sabotage and a plot to put incendiary devices on planes, Western intelligence officials say. The unit was set up in 2023 in response to Western support for Ukraine and includes veterans of some of Russia’s most recent clandestine operations, reports Bojan Pancevski. The group, known by its Russian acronym SSD, is believed to be behind a host of covert attacks on the West, including the attempted killing of the CEO of a German arms maker. --wsj

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Asteroid 2024 YR4 currently has a 2.3 percent chance of hitting Earth on 22 December, 2032, making it the biggest extra-terrestrial threat in more than two decades.
Scientists have calculated the impact risk corridor of the space rock stretches eastwards from the Pacific Ocean, over South America, the Atlantic Ocean, Africa, the Middle East, and into Asia.

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Bill Gates envisions a world where smartphones are supplanted by electronic tattoos. These temporary, electrically conductive tattoos would be applied directly to the skin, effectively turning our bodies into living, breathing communication devices.

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Subsidizing Unproductivity

Vance's speech in Europe raised some uncomfortable ideas. There are more.

An article in The Telegraph has raised questions about England's disability program.  

Expenditure on incapacity and disability benefits for people of working age has risen from £36bn four years ago to £48bn in 2023 to 2024. And the number of new claimants each year has doubled to nearly 500,000.

it’s not got much to do with growing levels of ill health. It’s much more likely because incapacity benefits are quite a lot higher than ordinary unemployment entitlements, and in some cases, rather better than working for a living.

Combine this difference with a medical profession that seems prepared to sign patients off as long-term sick at the drop of a hat and create an immediate incentive for worklessness, especially for those in dead-end, low-paid, physical work who are approaching retirement age.

Young people who have never worked also seem particularly prone to jump aboard the incapacity bandwagon.

What we seem to have, according to the Resolution Foundation analysis, is a country where growing numbers are signed off sick, with the effect being offset by a similar number of previously inactive people, due to childcare or other responsibilities, coming back into the workforce.

In any case, none of this is good for growth and is a long way from the welfare state originally envisaged by its founding fathers.

More, it raises questions about the basic values the West has assumed for years.

Buffett and the Money Supply

The U.S. is subsidizing 1/3 of the government costs of Ukraine. That includes teachers and pensions.

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Debt costs as a share of total outlays over the next 30 years 

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The Equal Employment Opportunity Commission (EEOC) filed a lawsuit against Meathead Movers for alleged age discrimination.
In a new release announcing the suit, the EEOC alleged that “since at least 2017, Meathead Movers failed to recruit and hire applicants over 40 into moving, packing and customer service positions. Meathead maintains a pattern or practice of recruiting and hiring young college students, intentionally excluding older workers regardless of their individual abilities.”

Interestingly, there was no complaint; the agency generated the case themselves.

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Buffett and the Money Supply

Warren Buffett's firm Berkshire Hathaway sold $28.7 billion of stock in the first three quarters of 2023. Buffett's and Berkshire Hathaway's recent lightening up on stocks and accumulating a pile of cash—$157 billion.

Steve H. Hanke, a professor of applied economics at Johns Hopkins University who served on President Ronald Reagan's Council of Economic Advisers, said, "The money supply of the United States, broadly measured [M2], started contracting in July 2022, and has been falling like a stone. Since last year, the U.S. money supply has contracted by 3.3 percent."

According to Hanke, there have been only four periods in U.S. history—in 1920-21, 1929-33, 1937-38 and 1948-49—in which the money supply has had significant contractions.

"Each of those four episodes was followed by a serious recession," he said. "The current monetary contraction is clearly going to lead to precisely what monetary contractions always lead to: a recession."

EVs and Labor

Mike Babcock resigned as coach of the Columbus Blue Jackets on Sunday after just two months on the job, less than a week after his requests for personal photos from players in a bonding effort drew criticism as too invasive.

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There is a surprising number of articles on liberal TV about Sen. Tim Scott's secret girlfriend. Is this a subtle effort to raise the 'gay' question about him without appearing to do so?

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EVs and Labor

The traditional internal combustion engine has more than 1,000 parts. New electric engines have about 50. That means fewer jobs because EVs are much simpler and therefore easier to make and assemble.

In late 2022, Ford CEO Jim Farley told the Financial Times that manufacturing EVs requires about 40% less labor than making the same number of internal combustion vehicles. VW's CEO in 2019 estimated that building EVs involves about 30% less effort than making gas-powered cars.

So a political group claiming to support 'workers' would take what position on EVs?

Babes in Economics Land

Late last month, US Rep. Alexandria Ocasio-Cortez tweeted a criticism of Ivanka Trump, who had said she was against the idea of a guaranteed minimum wage because "I don't think most Americans, in their heart, want to be given something. ... People want to work for what they get. So, I think that this idea of a guaranteed minimum is not something most people want."Ocasio-Cortez responded, "A living wage isn't a gift, it's a right. Workers are often paid far less than the value they create."

This random proclamation will undoubtedly be translated by her fans and critics as a restatement of Marx's Labor Theory of Value which states that the profits of production were taken from the worker who provided the product's value and given to others, capitalists, which raised the product's cost out of the very worker-creator's grasp and created a separation, an alienation, between the worker and his work. It is a pillar, perhaps the pillar, of Marxism.

As with all of these revolutionary utopias, there are obvious problems. What about the capital expenses, the land, the engineering costs? It goes on and on. What about the shortstop or the painter, how is his value calculated?

The insight came from Carl Menger, who eventually created the Austrian School, and others who argued that value was subjective. Rather than the labor input that created it, value of a good emerges from human perceptions of its usefulness for the particular ends that people had at a particular point in time. Value is not something objective and transcendent. It is a function of the role that an object plays as a means toward the ends that are part of human purposes and plans.

So Marx was turned on his head: The value of inputs like labor were determined by the value of the outputs they helped to produce. Labor gets rewarded according to its ability to produce things that others value.

Probably beyond AOC's survey course. But you can always smooth over the rough edges with a little violence.

Epstein

Theo Epstein has an interview with an interesting insight to his view of career management:

As president of baseball operations for the Chicago Cubs, he became one of the most important people by following a rule that fast-tracked his career, including what many thought was impossible, a resurrection of the Chicago Cubs. After 108 years, the team won the World Series again in 2016. "Whoever your boss is, or your bosses are, they have 20 percent of their job that they just don't like," Epstein tells David Axelrod on his podcast, "The Axe Files."
"So if you can ask them or figure out what that 20 percent is, and figure out a way to do it for them, you'll make them really happy, improve their quality of life and their work experience."
In other words, take on the aspects of your boss' job that he or she hates.
By diving into the less glamorous work, you will gain respect as well as "invaluable experience for yourself," Epstein says. (from Yahoo)

Unemployment

The unemployment rate is the percentage of unemployed people in relation to the universe of people who either have or are actively looking for a job- i.e. the labor force. An unemployment rate of 4.9% means that 95.1% of people who are looking for jobs have them.

People who give up looking for work because they think things are hopeless are called discouraged workers and, added to the unemployed, they are 5.2%

People who aren’t actively looking for work but would take a job if it presented itself  are called marginally attached workers and , added to the above,  they are 6.0%

People who are working part time because they can’t find a full-time job added to all of the above make 9.7%

Simpson's Paradox

Elaine Schwartz  has an article on  Project Include which will be tracking employment data in the Silicon Valley. Their initial goal is to form a list of metrics, to gather the facts from 18 firms, to anonymize all and then share the results. As a baseline, those results can become a springboard for inspiring diversity. She raises the question of Simpson's Paradox.


Simpson’s Paradox
To illustrate Simpson’s paradox, I found more detailed data for a similar situation at the University of California in a 1973 gender discrimination case:

From: Casper Albers Bog

Because 44% of all male applicants and 35% of all female applicants were accepted to their graduate schools in 1973, gender discrimination seemed rather obvious…until you took a closer look.

From: Brookings

As you can see, more women applied to more competitive departments. Meanwhile more men competed for spots in departments with high acceptance rates. Combined, these stats conveyed the impression that women experienced discrimination. However, if we consider the relationship between the proportion of female applications and admissions rates the data point us in a different direction.
Similarly, in the more recent Dutch case, analysis of the data by a Dutch psychologist indicated no discrimination. But, as he adds, although the data indicate no bias, that does not mean it did not exist.

Minimum Thinking

"Economists have written scores of papers on the topic dating back 100 years, and the vast majority of these studies point to job losses for the least-skilled. They are based on fundamental economic reasoning—that when you raise the price of something, in this case labor, less of it will be demanded, or in this case hired.
Among the many studies supporting this conclusion is one completed earlier this year by Texas A&M’s Jonathan Meer and MIT’s Jeremy West, which reaffirmed that “the minimum wage reduces job growth over a period of several years” and that “industries that tend to have a higher concentration of low-wage jobs show more deleterious effects on job growth from higher minimum wages.”
The broader research confirms this. An extensive survey of decades of minimum-wage research, published by William Wascher of the Federal Reserve Board and me in a 2008 book titled “Minimum Wages,” generally found a 1% or 2% reduction for teenage or very low-skill employment for each 10% minimum-wage increase."
All this from econometrician and economist David Neumark in an essay in the WSJ
None the less  President Obama says “there is no solid evidence that a higher minimum wage costs jobs.” His probably being wrong is not as important as his certainty and his eagerness to vilify people who do not agree with him. There is a lot of uncertainty in life and it should be recognized and taken seriously. But in this partisan world of ideologues, open-mindedness and honesty is a separate enemy. And Manichaeism allows for no compromise. 

Tolpuddle Martyrs

 In 1833, after several years of reductions in their agricultural wages, a group of workers in Tolpuddle, a small village east of Dorchester, England, formed the Friendly Society of Agricultural Labourers. Led by George Loveless, a farm laborer, the union rapidly grew in the area, and it was agreed that the men would not accept work for less than 10 shillings a week. With the urging of the British government, which feared a repetition of the rural unrest of 1830, local authorities arrested Loveless and five others on charges of taking an unlawful oath, citing an outdated law that had been passed in the late 18th century to deal with naval mutiny. In March 1834, these six men, including one who had never taken the oath, were sentenced to seven years imprisonment at an Australian penal colony.
Public reaction throughout the country made the six into popular heroes, and in 1836, after continual agitation, the sentence against the so-called “Tolpuddle Martyrs” was finally remitted. Only one of the six returned to Tolpuddle; the rest emigrated to Canada.
The event is seen as the beginning of trade unionism in Great Britain.

A Downside to Symbolism

A boycott of the Beverly Hills Hotel — joined by people as mainstream as Jay Leno — has been instigated over the human-rights policies of its owner, the Sultan of Brunei.
Here is a response by a waitress at the Polo Lounge in the hotel:

 ". ...How does this boycott affect the Sultan and his politics?  The short answer is that it doesn’t. The UAE, Saudi Arabia, Brunei, as well as many other countries with dubious human rights records, are heavily invested in the West, in hotels and movies, in Apple and Twitter, in Citigroup, Time Warner and Valentino to name a very few. In fact, Qatar Investment Authority (the sovereign wealth fund of the Sharia nation of Qatar) is the lead investor of Miramax. But most of these countries’ money doesn’t come from any of these investments, large as they may be. It comes from oil. It comes from the oil we all use.
And therein lies the both the flaw and the hypocrisy of the boycott. To threaten the demise of The Beverly Hills Hotel does not begin to touch the Sultan financially or politically. We don’t pay his check, Shell does. Using the hotel as leverage is really no leverage at all.
How does this affect me?
The Sultan isn’t our boss; he’s our investor. His laws, which are completely not aligned with our code of conduct, do not reach Dorchester Collection properties.
We at The Beverly Hills Hotel are women. We are men. We are gay. We are straight. We are multinational and multicultural. We are the ones who will feel the monetary loss. Profits from the hotel don’t go back to Brunei; they go back into the hotel, to us and to the community.
We participate in AIDSWalk, The Revlon Breast Cancer Walk; we participate in charities and contribute to the preservation of our environment.
Some of the celebrities who struck out most venomously against us were some of those we saw most often. I wonder how, knowing us as they do, they have no problem making The Beverly Hills Hotel the face of their outrage? They, to my knowledge, have no problem with any of those companies listed above whose money is also stamped with the blood of Sharia Law, companies who (with the exception of Miramax) have no personal connection to them as we do.
What should we do?
Some have called for us to quit or to strike and join the boycott. We don’t want this. We love our job and the incredible company for which we work. This is the company that recognized same-sex partnerships before gay marriage was legalized by recognizing and offering insurance to the partners of my co-workers. This is the company whose benefits and commitment to equality transcend any I’ve known.
The concern for human rights is commendable. We should all be part of finding a solution for this global problem. The solution starts with our government and others. Reducing our dependency on oil would help, too. But reducing my income won’t help, I promise you."

The Cycle of Structural Change

There are some chestnuts in investments that are held in great regard. "There is nothing new", "History repeats itself", "It is never "This time it's different"". This is ingrained in our belief in cycles. Things move in a constant sine wave, up and down, action and reaction, creation and destruction and recreation. Our little dialectic. So how do we look at this current world?

It is generally believed we are on the downside or bottoming out of a downside and will eventually labor back up. But there is another translation. What if we are in the middle of a new structural change?

We--our economy--are dependent upon work and production. Work and production are functions of labor, technology and capital. Capital has been in debate for centuries, technology always evolves but labor is more straightforward. The economy needs people willing to work, able to work and available to work. The "willing" and "able" is again easily confused and obscured in debate. But availability is more accessible. The working world is that large area between growing up and retirement. The growing up period seems to have lengthened; adolescence has become prolonged. The learning, student, maturing period is simply longer. Retirement has also lengthened, not just because people are living longer but they are retiring earlier. This seems to be a function of a number of factors, the failure of reward at work, the notion that there is reward in permanent leisure, the belief that this retirement leisure is deserved.

So the working period of life is shrinking but this period of work and production is what pays for adolescence and retirement. Production is being squeezed in the culture; fewer and fewer are producing for more and more.

Now technology might help a lot but that looks like a structural problem, not a cycle, unless it is the harbinger of a new, as yet unseen, cycle.