Thursday, January 09, 2003

And now, via Charles Kuffner, a little news from Texas, where the Republicans are confronting a budget that's completely out of whack, and hilarity ensues:

I'm not sure what "pushed back major payments for Medicaid and Medicare" means, but it sure sounds to me like the kind of accounting tricks where you charge something to one year's budget instead of another's. If so, what difference does this make? It was an obligation, and one way or another it had to be paid.

Indeed, as Paul Krugman reminds us, that sort of trickery has been a feature of the Texas state budgeting process for quite some time now. But, as Krugman also notes, it made a difference when it was done: the guy who was governor then could appear to have the state in good financial health despite his aggressive tax cuts --- a matter of no small import to him, as he was seeking higher office (which he eventually got, though it's a matter of some debate whether he earned it).

But the Texas Lege has to deal with the consequences now. Why? Because the state constitution requires a balanced budget; when the bills are dated, they must be paid.

Which is one problem that no longer bedevils that former governor. Where he is now, he has a bigger budget and bigger tax cuts to fudge, and no nasty balanced-budget requirement, so he can let the bills pile up for quite some time. Mind you, the consequences of that are already starting to be felt. But all he has to do is cover that with a little flim-flam. The guy may not be comfortable with numbers, but he's comfortable with that...

Wednesday, January 08, 2003

Here's a story that conservatives of a certain stripe tell a lot these days:

A scholar writes a book which claims that scholarly conventional wisdom in a politically controversial area is just wrong. It's loaded with charts and figures, carefully footnoted to detailed data which supposedly proves his points. But outraged scholars in the field respond that the book systematically distorts the facts, and that the data was cut to make the conclusions fit an agenda. A scholarly review panel is convened, and while they can't prove intent to defraud, they can say the evidence in the book is either dramatically skewed, or just not there. Suddenly, the hot new scholar may not be able to hold onto a job.

Conservatives say that's why you should ignore Michael Bellesiles when you're talking about guns in America. They're right. Remember that the next time you hear them praising Bjorn Lomborg's take on the environment.

In 1996, telephone deregulation was sold to the public like this: We'd like to let you customers choose among competitors for local phone service, so that you can get the benefits of a competitive market. The problem with that idea is that there's only one company that owns the wire going into your house, and there can't be competition until it lets other companies use that wire. So, we'll require local phone companies to allow that access, and let them enter the lucrative long distance market only once they meet that requirement. Then a thousand competitors will bloom, and innovative cut rate telecom services will flourish.

That was the theory. Cut to practice: the first consequence of deregulation was the elimination of potential competitors, in an orgy of mergers and consolidation (not least because of the overly leveraged buying spree that ultimately left Worldcom in bankruptcy, as the FCC looked on, bemused). At the same time, the phone companies used their connections with overly friendly regulators to whittle away at the access requirements for competitors until some might have wondered if they even existed any more.

Well, soon they won't. The FCC, under Michael ("Colin's kid") Powell, is proposing to let incumbent local phone companies charge anything they like for access to their local wires, allowing them to price their competition out of the market. Which, when achieved (most likely; the FCC listens only to industry leaders on these matters, and which of them will oppose it?) will mark the transition of local phone service from a regulated monopoly, to a monopoly which can screw its customers however it likes.

Mission accomplished.

Tuesday, January 07, 2003

An idle thought, while waiting for inspiration to hit:

When Dubya's boosters try to sell diplomacy as the best course of action for the Korean mess, they often cite the economic consequences of a war with North Korea, which could leave the South physically devastated; Seoul is right over the border.

Yet, when boosting the idea of an attack on Iraq, they talk down the danger of a side attack on the Saudi oil fields, which are right over the border from Iraq . (Or more precisely, that border cuts through the middle of what is really one large oil field, with wells on both sides).

  Is it too much to ask that we make up our minds?!?!

Another idle thought: Am I the only person who suspects that the Republican failure to extend unemployment benefits last month was a deliberate ploy to let them bundle the extension in with Dubya's tax package, to try to make it look a little more balanced?

Monday, January 06, 2003

In the Times story on Dubya's plans for Iraq, it's no surprise that the plan calls for American control of the oil fields. But, lest you think that the idea is to try to reduce the domination of OPEC, a cartel dominated by Dubya's Saudi masters partners, over oil prices, consider this:

The administration is already anticipating that neighboring Arab nations may accuse occupied Iraq of pumping oil beyond OPEC quotas. One official said Washington "fully expects" that the United States will be suspected of undermining the oil organization, and it is working on strategies, which he would not describe, to allay those fears.

On the other hand, it's wise to remember that there are Americans who might benefit from this strategy as well. Mostly in the Texas oilpatch.

Sunday, January 05, 2003

A few years ago, Michael Jordan found out that there is such a thing as bad publicity, when activist groups did a little math and found out that he was getting more from Nike, via his endorsement deal, than all the workers in their third-world shoe plants put together. Nike faced this among other sins, including violation of the minimum-wage and labor laws of the countries in which the factories were located, putting children to work under sweatshop conditions, and beatings of the workers.

It was obvious from just looking at the numbers that Nike could easily have afforded to pay much more for their labor, by any meaningful measure; even without the comparison to Jordan's salary, there was the raw fact that total labor costs for a $70.00 shoe were estimated at about $2.75. They eventually quieted the noise with an agreement to improve conditions in the plants, though they've since been criticized for not living up to their promises.

But proponents of globalization don't usually dispute that conditions in third-world facilities operated by (or on the behalf of) American multinationals are really bad. They argue instead that things would be even worse for the workers without it. You can find this argument extended for entire chapters in books like "Thunder from the East", by New York Times writers Nicholas Kristof and Sheryl WuDunn, from which I'll quote a sample to give the flavor. Here, on p. 128, he's interviewing a garbage picker, one of thousands working a dump covering hundreds of acres outside of Jakarta:

I approached one woman who looked to be in her early twenties and was accompanied by a three-year-old boy who trotted and wobbled at her heelds. The woman's name was Tratiwoon, and she paused to explain her work. ... [S]he carried a reed basket in which she put dirty rags, old magazines, and anything else that could be sold to recyclers. She and her son, who wore only a pair of shorts, were both baefoot, and I wondered how they avoided cuts and infections as they marched around that muck with it sbroken glass and old wires. Then I quickly realized that they did not avoid them, for I saw sores and scares on both their feet. ...

"I live right over there [Tratiwoon said], on the edge of the dump. Most of us live just outside, although a few people live right in the middle of the dump." ...

Tratiwoon estimated that she earns a bit more than $1 a day .... When I asked her about the sweatshops that I had noticed earlier in the neighborhood around the dump, she beamed and spoke dreamily about how much she would like her son to get a job in one when he is older. But she worried that such a job might be too exalted for him. "He's not going to get an education, so I just don't know whether he can get a job like that."

It was plain that Tratiwoon regarded the worst of sweatshop jobs as far loftier than her own work, and she was right. Even if her son gets only a twenty-five-cents-an-hour job in a hellish little factory with dangerous fumes, he will sweat less and be healthier than if he stays on at the dump. ...

This then, is the argument of uncritical free trade advocates: yeah, the workers are working sweatshop hours in dangerous conditions for next to no pay, but hey, it beats picking trash directly out of a poisonous dump for even less. And they acknowledge that the companies could pay more, or work their workers less. But even merely doubling their salaries, raising prices by an amount that consumers would hardly notice, would violate the discipline of the marketplace, the great oracle which tells us how things should be in this, the best of all Pareto-optimal worlds.

So, they say, as bad as conditions for the workers may appear, the system is saving them from even worse. But similar arguments were, advanced for other economic regimes which we wouldn't want to go back to, like sweatshops and dangerous unregulated mines in America at the turn of the last century, or Southern chattel slavery before that.

But beyond the false inevitability of sweatshop conditions in factories, there's another sense in which the choice between sweatshops and garbage dumps is often a false dichotomy; it ignores other options for the workers which globalization has closed off. From Mexico to Nigeria, for example, cities are getting choked with small-scale farmers who have been dispossessed off their land by "structural adjustment" or other forms of globalization. I don't want to overly romanticize the lives of these farmers; they face hard, back-breaking work in uncertain conditions. It's not a life I would envy or choose. But it's certainly better than trash-picking, and at least comparable to twelve to sixteen hours a day in a dangerous sweatshop.

Which is not to say that the anti-globalization crowd is right about everything they say, of course. Kristof makes a good point when he notes that naive anti-sweatshop activity often results in the mechanization of the plants, which eliminates jobs and sends the workers back to the trash dumps. But the veneer of hard-nosed analysis which globalization advocates present hides some stunningly naive analysis of their own...