Saturday, September 26, 2009

Spoiled: The Economic Downturn, Luxury as Necessity, and "Struggling" in the Modern Economy.

My original comment was not meant to imply I don't believe that there are tangible effects on people (most notably unemployment, which is certainly up compared to a few years ago).
All I said was that media and politicians largely made it up. I think it is a self-fulfilling prophesy to an extent, where in people hear constant messages that times are tight, therefor they cut back on consumption, therefor retail markets fall, therefor manufacturers cut back, and employers start laying people off. Which fuels the beginning of the cycle even more. This is why business analysts track "consumer confidence". In fact, to a large extent it is what the stock market is all about. Its less a question of how well a company is doing and more one of how popular are they. If people think its doing well, they buy, which itself drives the stock price up. It works both ways, so if everyone is convinced the market is doing bad, they sell so they don't lose too much by waiting, and then companies don't have the capital to invest.


I think it is totally unreasonable to adjust what it means to be "poor" based on those around you.
If we did that, billionaires could claim to be poor if those around them are multi billionaires. In fact, everyone except for the single richest person in the world would be "poor".
Clearly there should be some objective standard of poverty.
I think the only reasonable one is the point at which you have a reasonable fear of not being able to provide the basic necessities for oneself and family. Food, shelter, clean water. If you can afford so little food that it affects your health, you can claim to be poor.

It doesn't have to be a "big" car. If you own a car, you aren't poor. Period. Never mind that most people in the world couldn't even afford the up-front purchase price of a car. Much higher than that in the long run is costs for fuel, insurance, parking and tolls, maintenance, tickets...
For hundreds of thousands of years of human existence even the wealthiest people in the world could not buy cars.
Only in the US do people honestly believe that they are a "necessity".
All over the country people claim to be struggling who are paying for cable TV. They eat out and buy $2 cups of coffee. They have cell phones and internet connections. These are things most people and the world can't afford. They are not basic necessities.

Supposedly a person in the bay area needs 3 times the federal poverty level in order to live "comfortably"

They take it for granted that everyone needs a car.
And since when does every 6 year old need her own room?!
In the case of the 2nd article, I have no contempt for the person they profile. She (rightly) considers herself middle class.
(Hopefully, after having been interviewed she doesn't change her own standards).
Now, going into collection, obviously a problem. Thing is, that is another of those uniquely American things: living beyond your means.
The whole recession started because of people deliberately buying beyond their means with interest only loans. The whole idea being, buy something you can't afford and assume that the market will go up enough to cover it. Then, surprise! The people who were living beyond their means defaulted on their loans.
Consider that the size of an average new home has increased 250% over the past half century.

Then banks didn't want to lend. "Credit crunch". Well, again - the solution to a credit crunch? Don't live beyond your means.

Thing is, poor people don't get lines of credit extended to them in the first place. Because they are poor. The people who go to Labor Ready for temp work, the people who live here in the trailer park, they don't get loans for houses or new cars. They don't have credit cards. Most of them don't even have bank accounts. They pay rent with money orders and bring paychecks to check cashing places.

This is poverty:
And it was around long before the foreclosures on sub-prime loans started piling up.

In my line of work, between my low rates, and my green focus and good reputation, I end up having a huge range in terms of the incomes of my customers (hence the sliding scale idea).
I get students and people on SSI who genuinely can't afford more than me. I get others who live in 6 bedroom 3 story houses in the hills. I have been nonchalantly handed $100 tips on more than one occasion.

I also work with day laborer sometimes. These are people who will work for pretty much whatever you offer to pay them, work incredibly hard, and never complain. I ask them about work, about home, they invariably tell me: they are getting very little work here. Very little. But it is still better than the situation back home. That's why they are here. They work for less than minimum wage since they lack language skills and legal papers.
A customer yesterday mentioned her mother used to work for Nike in Vietnam. The company ships the product clear around the world because the people will work for a fraction of the US minimum wage. But she said it was a very decent salary compared to other options available to the people there.

The worldwide average income for an adult is roughly $7000. (note, this is over a decade out of date - the inequality has grown since)
That's including the 1st world; including the US.
This is in "purchasing power parity" - accounting for not only exchange rates, but what you can actually buy with a given amount locally.

Over 80% of the worlds population has an annual income below that rate.
The world median income is $1700.

So, yeah, I do think that is pretty much just the homeless who have a legitimate claim to poverty in this country.

There are plenty claims that the economic downturn hits the poor hardest: but then, they are putting people who own $290,000 4-bedroom townhouses in the category of "working class"

The truly poor don't have far to fall. A recession can not possibly affect them as much as someone who has tens or hundreds of thousands of dollars of annual income to potentially lose.


The last thing I wanted to mention is about how profit distribution ties in to unemployment.
In this country it has always been accepted as a given by almost everyone that 100% of the increase per worker in productivity due to advances in technology goes to the owners of the company, and not to the employees.
For example, say someone invents a machine that allows a worker to produce 2 times more widgets per hour.
What happens is (since the market for widgets hasn't grown, so they don't need to produce twice as many) the company lays off half it's work force, produces the same amount of widgets, sells them at the same price, and increases its profit substantially (paying half the wages, but making the exact same revenue).

There is no inherent reason that they couldn't instead reduce all of the workers hours 50%, while increasing wages 100%. Neither the employees nor the company loses any money. They both make exactly the same as they did before. The only change is the workers have half the work hours, and can use the rest of that time however they choose.
In the 2nd option no unemployment is caused.

In actuality productivity per worker has increased roughly 20 fold over the past century.
Over the same time (adjusted for inflation) wages have only increased 7 fold. The entire rest of that increase has gone to profit - ultimately to the upper class, who own the means of production.

Profit is after business expenses and costs and taxes, after wages, even after salaries to the CEO and upper management, often in the millions (even among companies that are losing money - even ones that got federal bail out money paid million+ salaries.)
Profit is what is left over after that. It goes to people who do literally no work for it at all.
There are industries which make as much as 20% profit margins.

So when companies claim they "have to" lay off workers because they are making less revenue, I say they are full of crap. If they are making ANY profit, anything over breaking even, they have no justification for laying people off. If they are paying upper management 6 digit incomes, there is no justification for laying off their lowest wage earners.
In many European countries (and Canada) that is actually illegal. The government can (and will) sue a company for laying off workers unnecessarily. In these places it is understood that the whole purpose of the economy is to serve the needs of the people, not to make people with investment capital even richer.

We could reduce unemployment to the minimum possible by having overtime kick in at, say, 35 hours a week. Then to maintain current levels of production, companies need to hire 15% more people just to get back to the level they were at before.

There is nothing inherently good about creating wealth (or widgets for that matter) just for its own sake.
Going from multi-millionaire to billionaire will cause no overall long-term increase in happiness.

But instead of increasing the income of the destitute and struggling up to the level of secure in basic necessities, as a society we have been allowing - even encouraging - all of the increase in wealth to go to the top levels of society. The ranks of middle class conservatives and libertarians push for this hardest of all:


It's human nature to want more than whatever one has, and to want more than everyone around you.
And everyone wants to believe they earned what they have, no matter how strong the evidence against it, because its easier on the conscious than admitting being greedy and amoral.
Its what explains the "pull yourself up by the bootstraps" myth.
You can see it in everyone who rallies against illegal immigrants. They will insist it has to do with following laws for the sake of laws, but suggest making all immigration legal, and you find out its really about allowing them government benefits and taking American's jobs. The only way to justify it would be to claim that some people "earned" being born in a first world country. (People always have the "us vs them" xenophobic mentality that makes benefiting at the expense of others ok as long as they are "others")
I think that, just like with laws to discourage violence, or the use of birth control, discouraging some of our basic instincts is better for everybody; the desire to always have more, on a planet with finite resources, is what makes people who live extravagant lives in this country think they are poor. I think that's not ok.

The economic downturn means that people who lived excessively unsustainable lives now live moderately less unsustainable lives. It's actually not enough, but its a start.
I think that's a good thing.

Tuesday, September 22, 2009

Good News

A few days ago, coming home from work after dark, a neighbor came over to ask for a jump.
I took the alternator out of my truck, but the charger I use in its place has a quick charge / jump start option, so I brought that over.
While we waited for it another neighbor, someone new I had waved to but never met, came over to see if we needed any help.
Somehow we got onto the topics of being "green" and the recession.

The neighbor with the dead battery has been involved with a local semi-official flea market. The people running it are conscious of the fact that, along with being a way to make money, selling things second hand is also environmentally responsible. They are actively looking for ways to be more so, for example sourcing "plastic" bags made of plant materials. She had never heard of plastic island, but understood how it happened and the significance as soon as I described it.
The new neighbor talked about the house of cards credit schemes that led to our economic situation, about concentration of wealth, government and banks and the stock markets roles.
While I had plenty of my own to add, I found myself agreeing with nearly everything both of them said.

This in contrast to interactions with neighbors over the past couple years: the neighbor in the 10ft long trailer who blamed all the countries problems on "the liberals", the neighbor who couldn't see any possible reason to run bio-diesel instead of petrol when it costs more - even when I pointed out that even if he doesn't live long enough to see environmental harm affect his life his kids might, not to mention the narrowly avoided fist fight and the 3 year old who buried his dads meth needle.

Like I have written, its funny that global warming is the thing that finally got peoples attention - even though there isn't hard scientific evidence that human activity will change it in a significantly more dramatic way than the natural climate cycles already do - when we have known for many decades that our use of resources is totally unsustainable.
But whatever. Doing the right thing for the wrong reasons is better than not doing the right thing at all.

Now combined with economic changes, ideas I have been thinking about all my life are becoming more and more popular. What will life be like after the credit based economy has its debts called in, and we no longer have the capacity to exploit natural resources at an unsustainable level, (as is absolutely vital for the American way of life as we know it)?
Of course there were always others who imagined it coming someday, with varying levels of serious - movies like Six-String Samurai on the one end, cults and militias on the other.
But now I am finding it everywhere.
The Gubbins Experiment, a blog I read about a guy who has given up not only driving, but also accepting rides in any motor vehicle for a year, wrote his most pessimistic post ever. My boss, a small business owner with a contract with BART to run the BikeStation seemed to imply that the end of civilization as we know will happen within the next 20 years, and that it will hit dramatic and fast when it does. I met my most recent friend in part via (literal) dreams of a post-apocalyptic future.
And now, even here in the trailer park, people are thinking in global terms about sustainability and economics.

Contrast it also to discussions I have had recently with some single issue activists, who I found by and large narrowly focused on not just one issue, but one side of one issue, unable or unwilling to consider other points of view, ignoring historical and current contexts that don't support a pre-determined conclusion, and offering more criticism than real solutions.

Maybe I had it wrong all along.

Maybe it is the general public, the random ordinary everyday people in whom our potential salvation rests.
That is the most encouraging possibility I have come across in many years.

Monday, September 14, 2009

strengths and weaknesses

Like anyone else, there are some things that I do pretty well. For example, I’m a quick learner; I seldom do more to study than quickly review my notes and brush up on one or two of the more difficult concepts covered in class. I also have never had trouble with my weight; Though peers have complained about keeping their weight down or up, and calculated the calories of their foods, the only time I usually notice a problem with my weight is when it’s too low (and there have even been people who have told me that, for a girl, there is no such thing). Things like this, that I do well in, have often earned me praise. And although earning high grades and conforming to society’s standards of body composition pleases me, I don’t actually get a deep sense of satisfaction from earning “easy As” or being skinny. When I’m complimented on these things, I am always uncomfortable; especially about my weight. I know that these things are strengths of mine only because they are exceptional, and through no hard work on my part. Other strengths I possess, such as a loving nature, loyalty, and passion, have much more to do with my own choices and personality. But it is still the things I don’t have to work hard at that get me the most attention from those who don’t know me well.
It’s harder to think of things that I don’t do well. Many things I struggle with, such as paying my bills on time or keeping my apartment clean, I can disguise through compensatory behaviour. Social problems, such as over-emotional reactions and antagonistic speech, are so off-putting that I’ve rarely been approached directly about them. As a result, I take my shortcomings much more to heart than I do my strengths, even those that are self-created like lovingness and loyalty. While I attribute even these things more to my situations and genetics than myself, I tend to attribute my weaknesses to personal faults. Rather than viewing them as challenges, I become anxious when they are revealed and defensive when they are discussed.
Although I know that, in principle, I am the same as anyone else in that I have both strengths and weaknesses, I have a very dichotomic view of them; I rank many of my traits as “strength” or “weakness,” with a corresponding value of “good” or “bad.” And because I attribute many strengths extrinsically and weaknesses intrinsically, I find it hard both to enjoy the first and to conquer the other. Also, the fact that it is so much easier to disguise my weaknesses gives others the false impression that it is possible to be smart, skinny, loving, etc, without having a dark side of faults and struggles.
I don’t think it’s only me that sees things this way. I think this false dichotomy of strengths and weaknesses is the way our society is ordered, and the way we are taught to look at things. While it is true I am able to somewhat hide my struggles, they are easy to be seen by a discerning eye. But the fact is, the eye of society does not want to look directly at weaknesses. Although it is easy to get compliments about positive qualities, people often avoid the conflict that results from talking honestly about negative ones. As a consequence, our society has an unbalanced focus on what it means to be a whole human being.
This focus, which sees strengths clearly and yet avoids weaknesses, sets up an environment that is especially difficult for those who find that strengths - according to society’s standards - don’t come easily to them. I am a victim of this attitude as I squirm under compliments about my looks, but I am also a perpetrator of it as I turn it in upon myself and thus unavoidably tint my view of others. It is no wonder that, in such an environment, those with disabilities have struggled so long to overcome prejudice. When we falsely divide ourselves up by “strength” and “weakness,” we set ourselves up to be unable to see the strengths in our weaknesses, and vice versa. We also set up not only intolerance within ourselves for our own struggles, but with other people as well. We can really only see ourselves honestly, and grow together, when we embrace our qualities - both the ones that make our lives easier and those that make them harder.