Archive: Dec 2009

Good jobs, that is.  Not to be a cassandra, but I have concerns about the structure of the economy.  History has shown that the high standard of living in late-Renaissance Venice wasn’t sustainable [*].  While the relatively expensive goods of Venice were often of high quality, cheaper, mass-market goods produced in Britain, France, and the Netherlands were gaining in popularity.  Will the US suffer from the same fate?  In other words, are the high wages and standard of living in the US sustainable, economically?  Robert Reich has a gloomy outlook on his blog::

“But here’s the real worry. The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that’s been going on for years but which the Great Recession has dramatically accelerated.

Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.

This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. Today’s official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay as a condition for keeping them. Or they’ve lost higher-paying jobs and are now in a new ones that pays less.”

I think he might be on to something and I tend to be an optimist.  If this were 1992, I’d say we’re going to grow out of the recession the US was in back then.  Innovation, efficiency, and productivity increases would be part of the upswing in the ever-present business cycles.  But, are we in a different economic situation?  Have we maxed-out efficiency?  What about innovation?  Will we still be competitive in that arena?

I have two main concerns.  One is of industrial organization and the other is of income inequality, which I believe are inter-related.

1. Industrial organization.  In the US, smaller businesses are expected to create the most new jobs, but the deck is stacked against them, which is also a political and policy issue.  There’s a pressure towards increased scale and size.  Larger enterprises may be more efficient, but often are less innovative, categorically, due to constraints on “dynamic capabilities” {ability to innovate, learn, or continuously reposition itself more effectively than its rivals} and disincentives in the form of disruptions to current income streams {e.g., pharmaceuticals selling several profitable on-patent drugs in a category of drugs having little incentive to develop and market a “cure” for a particular disease in a new category of drugs.  Hence “incremental” innovations of slight modifications and new patents based on them.}
2. Income distribution.  I feel that over time, the pressure towards increased the scale of organizations will put downwards pressure on wages and the standard of living for most employees.  Why?  If industries are dominated by a few players there will be a tendency towards oligopsony {few “buyers” and many “sellers”} in labour markets.  Employees will have less bargaining power because the few employers will tend to tacitly collude.  If global competition inhibits growth, there will be further pressure to cut wages and/or outsource.

The feather in the US’s cap is human capital talents and a large skilled labour pool, but these matter the most in innovative and high value-added firms.  If the US starts to lose its innovative edge, there will be less demand for skilled workers and managers.  More income inequality.  While hardly definitive, the gini coefficient measures this::

In the US, the gini is on the rise, indicating a growing gap between the wealthy and poor.  What would be really telling is to examine what’s happening to the middle class over time, i.e., the shape of the Lorenz curve}.  I think for the vast majority of Americans, there may be more diminished expectations in store.  The top 2% have no worries.

So, I agree with much of what Reich has to say.  The goal isn’t just jobs, but good paying ones.  In my opinion, part of this in the private sector {as opposed to public sector efforts, such as stimulus spending} is more basic R&D that fuels innovation and more entrepreneurship, which will require policies to support it.

Twitterversion:: #RobertReich blogs on jobs in US. Given his take, are big firms&lack of innovation a big part of problem? #ThickCulture http://url.ie/3f80 @Prof_K

Song:: The Bleeding Heart Show-The New Pornographers

On my other blog, I did a post about driving pet peeves and a close call I had on the mean streets of Toronto.  I made a passing reference to the idea of “crowdsourcing” a database on boorish road behaviours.  Well, it turns out there’s a website that does just that, Zapatag.com {blog, Twitter}.  What is Zapatag?  According to their “about us” page::

“Report bad drivers, track license plates, zap a tag and upgrade your commute. Compliment a carpooler. Lash a litterer. Tattle on a tailgater. Snap at a speeder. Bring accountability back to our streets the Web 2.0 way. Don’t get mad on the road. Get even online.”

Technologically, it was inspired by Twitter, but the more interesting implication on this blog is how such sites might affect us in the future.  What about issues of::

• Privacy.  Is it a breach of privacy to link licence plate numbers to alleged incidents?
• Defamation.  Is it defamation to link a vehicle to alleged bad/illegal behaviour?
• Antisocial behaviours.  Will this lead to harassment, in terms of posting or retaliation for posting?

One of our fellow bloggers had a disturbing incident on a Thousand Oaks, CA thoroughfare.  I thought a site like this might be useful in cataloguing habitual offenders, but the technology does enable issues like those three listed above and probably more.  Privacy has been declared dead thanks to the Internet for over a decade.  What about defending one’s “reputation” online?  Where are the lines drawn between transparency and defamatory statements?  With the Internet and the decline of privacy, will the definition of defamation change?  A whole post could be on the antisocial behaviours angle.  What springs to mind is the cyberbullying mom case.

Invoking Bentham’s panopticon and doling out Foucauldian logics to each and every one of us {we all have the power of surveillance and voice with Web 2.0+}, will this lead to übertransparency and more mindful actions -or- will it create a anarchic free-for-all of accusations and defamation?

Song:: I Think Im Paranoid – Garbage

Twitterversion:: @Zapatag allows crowdsourcing of bad driving behaviours. It’s an interesting intersection of technology & society.  @Prof_K

I made a trip south of the border yesterday.  I drove all day to South Bend, IN to drop off a proposal and had dinner in Grand Rapids, MI, so I missed Obama’s Afghanistan speech.  I didn’t miss hearing the fallout from both the left and the right.  So, I’m wondering about what’s going to happen in next year’s midterm elections and I’m curious on what my fellow bloggers and the readers have on the subject.

Let’s turn back the clock.  Sixteen years ago, in late November of 1993 and Bill Clinton’s approval rating dipped under 50%.  Recently, Barack Obama’s ratings also dipped below 50%.  This got me thinking about some other trivia tidbits::

• A complex health care reform plan was under attack by William Kristol.  The “Harry and Louise” ads, funded by lobbyists aired to cast doubt on Clinton’s reform, using the catchy phrase, “they choose, we lose.”

• Clinton, a moderate Democrat, was being pushed around by conservative Democrats in Congress.  They felt he didn’t have a mandate with 43% of the popular vote [1] and won only because Ross Perot split the Republican vote.
• The Democrats enjoyed an 82 seat advantage in the House in 1993.  The current margin is 79 seats.  The Democrats had a 56/44 advantage in 1993.  The current advantage is  59/41.
• The stock market was on an upswing in 1993 {DJIA}.  This year, the market has spent the year recovering and is about where it was in 2004 [2].

On the other hand::

• Unemployment was 6.5% in December 1993, not 10.2% {Nov. 2009} [3]
• The Gulf War {Desert Storm} was a fading memory in 1993, while in 2009 Obama is gearing up for a Afghanistan surge at a $30B/year pricetag.

Historically, in 1994 there was a Republican landslide and the GOP took over both the House and Senate {although Clinton won re-election handily in 1996}.  Will history repeat itself?  I’m not sure.  In 1994, there was a clear and concerted effort by the Republicans.  Newt Gingrich and the “Contract with America” captured the imagination of many voters.  I’m not sure the GOP can pull that off in 2010.

While the Obama Administration has faced criticism from the right, he’s also under fire from the left on the issues of the economy and the war in Afghanistan.  While the Democratic Party machine would resist this, will the current circumstances provide opportunities for left-leaning Congressional candidates a rare window of opportunity?  What about the Republicans?  Will they regroup?  What about Libertarians?  Is this an opportunity for them?

Twitterversion:: Politically in the US, it feels strangely familiar to 1993.But,it’s not. What will happen in 2010 midterms? #ThickCulture http://url.ie/3d5n  @Prof_K

Please indulge my shameless self promotion, but his particular piece of academic hucksterism happens to dovetail well the mission of the blog. The inaugural edition of the Journal of Integrated Social Science, of which I am the Political Science editor and co-blogger Bryan Rasmussen is the Humanities editor, has just been published. In particular, I draw your attention to the editorial introduction which lays out the aims of the journal. Here’s an excerpt that captures the mission of the journal:

Today we find that scholars are becoming very specialized in one particular field of study thereby often under-emphasizing how their area of expertise relates to other fields of study. Having experts on given topics is, without doubt, absolutely essential in order to advance our understanding of human functioning. It is with this in mind that we are hereby launching the new Journal of Integrated Social Sciences (JISS) – a renewed collaborative effort, following the spirit of the intellectual pioneers from the 1860s, to bring together the rich and diverse set of disciplines through the new technology now available to us in the 21st century.

I encourage those of you with an interest in integrative, cross-disciplinary inquiry to submit their work and take advantage of a unique platform to engage in a broader scholarly conversations that those to which we are accustomed.