Ernie: Well said. But one thing I was thinking about was the newspaper business and related businesses like magazines. The news business tends to run on profit margins of about 20 %. Obviously it can be a little better or as low as the 10 % range. This is NOT a justification of all newspapers and how they operate. As maybe you know, I often am highly critical, as a matter of fact. But efficiency is not exactly something that a news organization can do much about. To gather and publish news is labor intensive, and when it is done right the public service provided is invaluable. Heck, I'd call it socially necessary. But where things have gotten is for the news businesses to be judged by the same criteria as other businesses. This has created huge pressures for newspapers, etc, especially TV, to become advertising platforms as news staffs are cut, investigative reporting is axed. and more and more reliance is placed on syndicates to provide content. Yes, in some respects, newspapers are killing themselves, But at least half the story concerns the current "Efficiency is God" model of economics. We are in an era when a newspaper goes belly up almost every week somewhere in the USA. This is not good --for anybody. And what does survive often is feature dominated and consists mostly of human interest crap --my opinion, anyway, since I really can't stand most human interest stories. They are worthless wastes of time. Think of network TV news. The days when there still was an Edward R Morrow legacy are long gone. What we now have are networks that dispense fluff and trivia and call it news. "Hard news" is when there is a tsunami or earthquake, but even then the focus is on innumerable mini-stories that basically focus on private dramas with little or no larger relevance. As for the Rust Belt more specifically, a multi-factor analysis is, as you pointed out, what is really most called for. Its just that the operation of people like Ichan, and his many lesser versions, is often near-totally overlooked by the free trade set as if the market was all anyone needed to think about when making an assessment. Which is rubbish. The market is just one factor. Maybe it is the most important factor, or maybe it usually is, but for sure it is NOT the whole story. Billy ============================================== In a message dated 3/12/2010 11:39:55 A.M. Pacific Standard Time, [email protected] writes:
Hi Billy, On Mar 9, 2010, at 11:42 AM, [email protected] wrote: >> b) This should *not* be confused with financial manipulation to create stockholder value by a brute focus on reducing costs without actually improving productivity, which should be *discouraged* [though to be fair, the line isn't always clear]. > > What do you actually mean? In other words, a community willingly may incur a > variety of costs in order to sustain decent employment levels, infrastructure, > social services like a new clinic, etc, but then a company decides to sell > in order to make a profit. A business may well earn a good return, say 20%, > but stockholders demand 35 % and the local business is sold off while no-one > cares in the least about the costs to the community that has sustained > the business over the years. Not an academic matter since this has > happened all over the Rust Belt in the past 10 - 15 years. Well, that's sorta what I meant: cutting businesses and workers due to arbitrary financial criteria. But that isn't always a bright line. For example, while stock-price-driven closures certainly have happened, I wouldn't say it is the *primary* cause of the Rust Belt's decline: http://eh.net/bookreviews/library/0686 > A broad range of factors led to the decline of the Rust Belt. High does a nice job of discussing some of the villains in this story. He focuses, for example, on the effects of globalization and international competition, the impact of changing technology (for example, the growing importance of the assembly line made multi-story factories obsolete), the role of right to work laws in firm location decisions, and changing tastes (for example, the growing popularity of radial tires contributed to the decline of Akron, Ohio as the rubber capital of the U.S.). I might have added declining transpor tation costs and communications to this list. The problem is that one person's "soulless capitalist layoffs" is another person's "refusing to reward incompetent managers and low-productivity workers". As a radical centrist, I view both characterizations with roughly equal skepticism. >> e) Deliberately reducing efficiency to protect jobs ends up i) dehumanizing workers, and ii) leaving us open to foreign competition (if not here, certainly abroad) -- and often rewarding incompetent companies. ;-( >> > Who is talking about reduction of efficiency ? To be blunt, most people who talk about "protecting high-paying jobs". Well, maybe not reducing efficiency, but resisting efficiency improvements. The data I cited showed that most of the loss of manufacturing jobs was due to increased productivity by those firms. To what extent do and should we insist that corporations make decisions based on past loyalty, national policy, and community investment/impact versus efficiency and profitability? I don't know the answer, I'm just saying it is a non-trivial question, and we need to acknowledge the cost on both sides. >> f) The crucial challenge is to *manage* the rate of industrial change and disruption. Technology always moves faster, but humans don't change. We can improve the safety net, but only up to a point. >> > Yes, but I'm not sure what the point is. The point is that in the long run the most efficient system wins, and efforts to 'protect' less efficient systems (industries, communities, nations) generally end up costing more than they save. If that's true, then the goal of a rational "industrial policy" is explicitly NOT to protect existing jobs, plants or market -- as many on both the Left and Right appear to be arguing. Rather, it should be to both: a) enable and encourage the emergence of future growth industries b) ease the transition from the present to the future Unfortunately, a lot of people seem to instead be trying to protect either unions or "legacy" corporations, who look nostalgically on the time of the 1950's when the rest of the world was still recovering from WW II and *had* to buy American. -- Ernie P. _______________________________________________ Centroids mailing list: [email protected] http://radicalcentrism.com/mailman/listinfo/centroids_radicalcentrism.com Archives at http://radicalcentrism.org/pipermail/centroids_radicalcentrism.com/
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