Archive for March, 2011

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Why The Market is Broken

I wish I could say. I’ve been digesting so much reading on the topic that I find it difficult to speculate. At the same time I’ve been thinking about the relationship of labor to management; not of my own accord but in response to the recent discussions going on throughout many state capitols. I’m going to do my best over a series of posts to hash things out for myself.

I want to kick things off with a quote that just about sums up my reactions to the worker/manager relationship:

The workers at the recuperated enterprises in Argentina, forced to learn about managing factories for themselves, learned very quickly that the MBAs’ poor-mouthing about “labor costs” and “competitiveness” was so much horse shit. They found that when they eliminated all the high-salared managers, most of the unit cost problem just evaporated. Since they didn’t have accounting degrees, they also didn’t know anything about ROI and the theology of direct labor hours. So they essentially reinvented, without knowing it, the cash accounting model of Henry Ford: if you have more money at the end of the week than at the beginning, you’ve made a profit.

The above may be a simple understanding of business and accounting, but it provokes an interesting thought; when CEO compensation has grown and worker compensation has stagnated in comparison over the past 40 years, I have to wonder why?

For this bit of self-reflection I want to explore the following:

  1. I’ve come to the conclusion that we do not actively participate in a free-market economy as we might think.
    • Government regulation of the markets have been for the good of corporations rather than the good of consumers.
    • Most licensing requirements hurt competition more than anything else; rather than to protect consumers they’ve created artificial barriers to those seeking to enter the market.
    • Corporate America has a cozy relationship to both major political parties–whether they’ll concede that point is debatable.
  2. Where do workers stand in all of this?
    • What has all of this rent-seeking accomplished in relation to worker compensation?
    • Why have CEO salaries increased, but worker wages stagnated or declined? (CEO as a stand-in for upper-level management.)
    • Are unions necessary? Perhaps–without proper codified protections, anyway.
    • Public worker unions seem to be an excellent example of rent-seeking–though some protections are needed.

That’s a lot to cover, but I’ll try to tackle each in a separate post if possible.

This is What Civility Looks Like

This is a particularly disturbing email, if true, simply because of how heinous and graphic it is. The individual(s) has/have threatened the lives of not only the Republican Senators in Wisconsin, but that of their families as well. From what I can tell this has not been widely discussed in the media, and considering the events of today (the earthquake and subsequent tsunami in Japan), may not be any time soon.

Full transcript at the source (h/t):

Please put your things in order because you will be killed and your familes will also be killed due to your actions in the last 8 weeks. Please explain to them that this is because if we get rid of you and your families then it will save the rights of 300,000 people and also be able to close the deficit that you have created. I hope you have a good time in hell. Read below for more information on possible scenarios in which you will die. 1

While it is possible that this email is real, it is also just as likely that it is as fake as it gets. BUT, if it is real, it presents a rather disturbing example of the hyper-partisan world we live in.

I’ve not participated in many discussions about the public union disputes going on throughout the country because of the kinds of attitudes represented in that letter, though most clearly do not hold views that are as extreme as exemplified above. So much emotion is tied up in anti-republican sentiment that people are not looking at their proposals rationally. Not that Republican ideas have been perfect, but this situation demands that cooler heads approach the problems.

All of this makes me want to step back from thinking about and digesting politics for a while. Its all getting to me. I get the feeling that people view me with pity when they find out I disagree with most Democratic ideas. As if I’m an uneducated slouch with no hope; why can’t I just see that only one party is for the little people and the other for ‘big-business?’

  1. Sykes, Charlie. Death Threats. Newsradio 620 Sykes Writes. Published March 10, 2011. Accessed March 11, 2010. <>

With Data Loss Come Minor Adjustments

When I lost nine months of data last month I decided I needed to do something to recover it by recreating as much of it as I possibly could. For the most part this has been an entirely successful endeavor, but in a few cases I’ve had to start fresh.

And so, it was with a bit of a heavy heart that I made an attempt to update this site, ever so slightly: a minor background adjustment, an updated menu, revamped code, and a streamlined structure.

I’m still getting used to the adjustments–after all I’ve had the same design for over a year now–but I anticipate that things will start to seem a little less strange over time.

But what of unions in the public sector? There seems to be a clear public choice problem: public unions and elected officials engage in mutually beneficial exchanges—generous compensation packages for political support and campaign finance—while shifting the costs on to the unorganized taxpayers.

Marc Eisner