Business – United States of Joe

Facebook Is Not Your Friend

Mark Zuckerberg invoked the iconic figures of Frederick Douglass and Martin Luther King, Jr. when defending why his company will allow political candidates to lie with reckless abandon. Wait, what? (Photo Credit: Anthony Quintano/Flickr/CC BY 2.0)

Q: What kind of company views the very existence of Elizabeth Warren’s presidential campaign as an “existential threat?”

A: Facebook, and the doom-and-gloom terms in which it frames this discussion tell you all you need to know about whose side it’s on.

What’s Mark Zuckerberg and Co.’s bugaboo about the progressive Democrat’s candidacy? Senator Warren doesn’t seem like the most physically imposing character. Could one woman really represent that much of a danger to a corporation worth billions of dollars?

Well, if she becomes President of the United States, perhaps. As a Democratic senator from the state of Massachusetts, Warren has built a profile championing corporate accountability and emphasizing standing up for the rights of end users of companies’ goods and services. Despite Joe Biden’s attempt to take credit for it in the most recent Democratic presidential debate, her signature achievement heretofore is the Consumer Financial Protection Bureau, a creation explicitly and singularly devoted to safeguarding average Americans in their solicitation of financial services.

On a related note, Warren has been a vocal critic of Wells Fargo and its executive leadership, memorably grilling then-CEO John Stumpf in 2016 during a Senate Banking Committee hearing about the banking giant’s underhanded business practices and later advocating for the institution to remain under a growth cap imposed by the Fed until it can evidence a willingness to comply with standards of equitable behavior. Seeing as Wells Fargo has seen a revolving door at the top since then and still languishes under an asset restriction, it appears her concerns are more than warranted.

Broadly speaking then, Elizabeth Warren represents a desire to more directly regulate corporate America, including the tech sector, distinguishing herself from rival Bernie Sanders as an adherent of capitalism rather than a self-described democratic socialist. For Facebook, meanwhile, an organization predicated on selling and manipulating user data which might have and should have faced stronger repercussions for the breadth of the Cambridge Analytica scandal, this does not compute.

Understandably, monoliths like Amazon, Facebook, and Google don’t wish to have their size or power circumscribed. The same applies to the big banks, who have met likewise with Sen. Sanders’s ire and calls for separation of their traditional banking elements and more speculative financial services. How Facebook is going about trying to resist demands for greater accountability, however, deserves every bit of admonishment and scrutiny.

Dipayan Ghosh, co-director of the Digital Platforms & Democracy Project at the Harvard Kennedy School and former adviser to both Facebook and the Obama administration, is one of the growing lot who believes it’s time for Facebook to be more strictly regulated. Ghosh’s sentiments come on the heels of an announcement by the social media titan that it won’t censor or even fact-check politicians despite the notion these ads may contain false or misleading claims.

To be fair, actors across the political spectrum are prone to false or misleading content in their political advertisements; Sen. Warren’s campaign, for a bit of shock value, recently led its own Facebook ad with the notion that Zuckerberg and Facebook had endorsed Donald Trump for re-election before admitting within the same space that that wasn’t literally true. (In response, the Facebook Newsroom Twitter account sent a rebuke of sorts referencing the ad, which is vaguely astonishing in itself.) Nonetheless, when a policy shift clearly benefits lying liars who lie such as Trump, such a move gives pause.

Let’s get one thing straight: Donald Trump is not a smart man, but he ain’t no dummy either. This is to say that he knows how to take advantage of an institution which helps his bottom line, and his campaign has exploited Facebook’s refusal to remove disingenuous political content with heavy investment in advertising through this medium as well as Google. While Joe Biden and his son Hunter’s alleged malfeasance have been a frequent target of Trump’s scorn—even though there is no evidence to suggest the Bidens have done anything improper and, ahem, people in glass houses shouldn’t throw stones—the falsehoods and rules violations have been widespread and numerous. In a way, this spending is a perfect microcosm of a presidency marked by its own flagrant falsehoods and rules violations.

For his part, Zuckerberg has sought to defend Facebook’s new open-door political advertising policy on free speech grounds, weirdly invoking the likes of Frederick Douglass and Martin Luther King Jr.—what?—in making his case across media outlets and envisioning his company as one which charitably allows for freedom of expression. Much as you can’t yell “Fire!” in a crowded theater or yell “Bomb!” on a airplane with impunity, though, if you’re a platform with the influence and reach of Facebook, you can’t let other people and entities with influence and reach wantonly peddle their lies—or at least you shouldn’t be able to. At the very least, if you’re going to enforce the rules (or not enforce them), you should do so without apparent political prejudice.

Ay, here’s the rub: for all the accusations of a liberal bias on platforms like Facebook, the company’s actions and its very structure suggest a complicity with conservatism and conservative figures/outlets. Over the past few weeks, Judd Legum has practically made Facebook’s dalliances with right-wing favoritism the raison d’être of his newsletter Popular Information. Among the items Legum has cataloged:

Zuckerberg meeting with Tucker Carlson and other conservative commentators and journalists to discuss matters of free speech and partnership, and Facebook naming the Daily Caller as a fact-checking partner despite a history of inaccuracies (to put it mildly)
Facebook stacking its D.C. office top leadership with veterans of Republican politics
Zuckerberg falsely claiming Facebook was created in response to and as a means to facilitate conversation about the Iraq War and other conflicts
Facebook permitting coordinated inauthentic behavior by the Daily Wire, originally Ben Shapiro’s baby, while acting to outlaw the same practices from progressive sources
Facebook failing to override its automated controls to flag and ban content for Black Lives Matter groups, LGBTQ activists, left-leaning small publications, and others forums which may be critical of conservative views

All this has made for a climate at Facebook hinting at a “frightening new world for political communication,” as Ghosh phrases it. He writes:

It is now the case that leading politicians can openly spread political lies without repercussion. Indeed, the Trump campaign was already spreading other falsehoods through online advertising immediately before Facebook made its announcement — and as one might predict, most of those advertisements have not been removed from the platform.
Should our politicians fail to reform regulations for internet platforms and digital advertising, our political future will be at risk. The 2016 election revealed the tremendous harm to the American democratic process that can result from coordinated misinformation campaigns; 2020 will be far worse if we do nothing to contain the capacity for politicians to lie on social media.

Could the Trump presidential campaign engage in the same kind of chicanery it did in 2016 and still lose in 2020? Sure. In fact, if the results of that election were based solely on the popular vote, Trump never would’ve been elected. Still, Facebook is playing a dangerous game, one which invites great risk to the American political process without much risk to its own survival and which allies the company with disreputable (outside of conservative circles anyway) people like Ben Shapiro and Tucker Carlson. It is deliberately trying to sway the election to serve the desires of executive leadership, whether it legitimately believes the kind of rhetoric from publications like the Daily Caller and the Daily Wire or not.

In doing so, Mark Zuckerberg and Facebook are making it clear they are acting only in their own selfish interests. That doesn’t sound like something either Frederick Douglass or MLK would’ve wanted.

When we talk about Facebook’s sense of responsibility regarding how it handles user data and the veracity of claims in advertising that appear on the site, opinions may vary with respect to how culpable we truly believe Mark Zuckerberg et al. to be. If we were to take, say, a Friedman-esque examination of things, we might aver that if Facebook is financially responsible to its shareholders and isn’t breaking the law outright, deliberations about corporate social responsibility are much ado about nothing. In other words, while we might find Facebook’s actions objectionable, as far as leadership may be concerned, they are doing what’s best for the business. At heart, that is priority one.

In this day and age, however, such a perspective is a minority opinion. Personal and organizational accountability matter, even if not everyone agrees on how we can enforce adherence to a certain standard of conduct. Fines against a company may look like an appropriate punishment, but not only might these sums function as a mere drop in the proverbial bucket for corporations like Facebook, they don’t get at the personnel and the faulty leadership structures to blame for such lapses or intentional misdeeds.

What’s more, assigning guilt to an entity without the capacity for feeling guilty (i.e. a corporation is not a person) arguably is of limited utility and may only serve to ensnare lower-level accomplices or negatively impact workers on the lower links of the food chain. Much in the way #MeToo can be scrutinized for how much change it has effected and how durable its assignment of repercussions, there is room to wonder how punitive these measures truly are for major players in the U.S. economy, especially within the tech sector. Both in terms of applicable statutes and defined ethical frameworks, we seem to be lagging behind Silicon Valley’s attempts to define itself as an adjudicator of moral standards.

So, what’s the answer? Owing to the complexity of the question re individual vs. company-wide responsibility, the potential solutions are manifold, but some part of what actions should be taken would seem to involve government intervention. As noted, Dipayan Ghosh, for one, believes it’s time to regulate. From the closing of his piece:

If Facebook cannot take appropriate action and remove paid political lies from its platform, the only answer must be earnest regulation of the company — regulation that forces Facebook to be transparent about the nature of political ads and prevents it from propagating political falsehoods, even if they are enthusiastically distributed by President Trump.
Our nation has always aspired to place the interests of our democratic purpose over the interests of markets. Silicon Valley should be no exception.

Going back to Elizabeth Warren, supposed existential threat that she is, she advocates going a step further and breaking up monopolistic tech companies like Amazon, Facebook, and Google, even going as far as to call for the undoing of certain mergers such as Amazon’s acquisition of Whole Foods and Facebook’s ownership of Instagram. Zuckerberg, in the leaked audio from a Facebook employee meeting that produced his quote about Warren in the first place, acknowledges the likelihood of a lawsuit to combat such a move, in the same breath expressing his confidence that the company would be successful in an eventual legal challenge. Are Warren’s plans unrealistic? Is Zuckerberg overconfident in this instance? By now, we’re used to big businesses winning, but the courts, interpreting existing antitrust law, may yet favor would-be regulators.

To say the least therefore, the fight over Facebook’s open-door political advertising policy appears far from over. In the meantime, and barring a course change like that of Twitter’s to ban all political ads (personally, I don’t love the idea the company is just throwing up its hands and waiving its potential to be a model actor, but it’s better than doing nothing), what you can be sure of is that, Facebook, a company which has never meaningfully apologized for the large-scale breach of trust exposed by the Cambridge Analytica bombshell, is not your friend. You may like being able to connect with family and friends and share photos and do all the things the social media platform is capable of doing. But executive leadership is neither truly interested in your privacy nor the sanctity of the First Amendment, and if you’re using the service, you’re implicitly giving your assent to their disregard of both. Whether that’s a deal-breaker is up to you.

OK, Socialism Is “the Devil,” but What About Capitalism?

Is a $2,000 pizza made with 24K gold, caviar, foie gras, and Stilton cheese inherently immoral? No, but it may not be worth it taste-wise, and moreover, the inequalities created by capitalism serve to make extravagant purchases like this seem wrong in deference to all the things you could buy instead with that money. (Photo Credit: Industry Kitchen)

WARNING: For those with delicate political and economic sensibilities, this piece will make repeated references to a particular term. A dirty word in certain circles, to be sure. In fact, some may be unable to speak it lest they devolve into paroxysms of uncontrollable shouting and frothing at the mouth. He doesn’t mean what I think he means, you shudder. Oh, but I do, intrepid reader. You guessed it: that word. The “S word.”

Socialism. (Boo! Hiss!)

As we approach Election Day 2020, attacks from the right have been trying to frame any and all serious Democratic contenders as “socialists,” railing against the purported evils of suggested policy shifts such as Medicare for All, free tuition at public colleges and universities, the Green New Deal, and other tenets of a progressive or liberal agenda. Under this haphazard framework, legitimate elements resembling facets of socialist societies can and do get conflated with all sorts of things right-leaning individuals don’t like.

Political correctness? Socialism. The LGBTQ “agenda?” Socialism. Migrants crossing our southern border? Socialism. Democrats “coming for your guns?” Socialism. Electric cars? Socialism. Liberal indoctrination of our youth? Socialism. The sissification of manly men? You better believe your patootie it’s socialism!

Thrown around recklessly in this manner, socialism also gets confused with other economic and political systems people either don’t grasp or haven’t bothered to try to understand. In the minds of some, socialism, a theory of organization which favors social ownership of the means of production and of working to satisfy human needs, is synonymous with communism, which can be seen as the next step after socialism in a post-capitalist society, and which advocates for doing away with notions of class, money, occupational specificity, and private ownership.

As a Bernie Sanders supporter, I’ve heard the question numerous times, “Isn’t he a c-c-communist?” As if the person asking were a character out of Scooby Doo or something, staring down a ghost. No, he’s not. As other democratic socialists believe, he feels both the U.S. economy and society should be run democratically to meet the greatest public need and not just for the benefit of a privileged few. Especially when understood next to communism, some might even believe his proposed reforms don’t go far enough.

Let’s not get bogged down in discussion of specific political candidates, though. The larger point is that talk of socialism, in the hands of bad-faith actors and critics, becomes a weapon used to discredit anyone and anything resembling a leftist or espousing leftist ideologies. In this sense, socialism is understood as both logically and morally inferior to capitalism. Ah, yes, capitalism. The free market. A model of economic efficiency free from the tyranny of government control. A bastion of Western rectitude and a symbol of the industry of a proud country like the U.S. of A. Surely, the right’s embrace of unfettered capitalism puts it on the right side of history. After all, you don’t want America becoming Venezuela, do you?

Put aside any notions of Venezuela possessing unique features which have led to its economic disarray (e.g. an overreliance on oil as a source of revenue) as well as doubts about whether socialism as it is designed has actually been employed there by the likes of Hugo Chávez and Nicolás Maduro (it hasn’t), though. If we are to invoke capitalism as a defense of why socialist functions can’t or shouldn’t exist in America, shouldn’t we be able to explain with a straight face why it is fundamentally better? To this effect, shouldn’t we all be able to speak to the wonders capitalism has done for all of our lives?

In a two-part video essay titled “What’s Wrong with Capitalism” for her channel ContraPoints, Natalie Wynn, ex-philosopher and YouTuber with a mind for social justice (and a great follow on YouTube and Twitter, by the by), addresses some of the potential shortcomings of a capitalist society like ours.

Beginning with a bit of context about acute feelings that something is wrong with our world as expressed by middle-class white males facing a changing population at home, an expanding global marketplace/exchange of ideas, and a commensurate loss of privilege, Wynn avers that while this sense of “getting screwed” is accurate, others are getting screwed worse. In this regard, and with respect to vague attempts to scapegoat other disenfranchised groups, the problem is not “the Jews,” nor is it feminism, the ghost of Karl Marx, people of color, trans people, vegans, or anyone else who might be labeled a “cuck,” a “snowflake,” etc. The problem is capitalism.

So, what’s wrong with capitalism? Wynn makes these salient points in service of her arguments:

Alienated labor: Or as Wynn simplifies it, “shitty jobs.” Because many workers have no stake in the profitability of the company they serve and are merely working to make money, ensure a path to other benefits, and/or not get passed over for a promotion or fired, there’s no sense of intrinsic reward from their efforts or a sense of camaraderie because they are being pitted against one another.

Depending on the situation, they might also be forced to engage in company retreats and other “team building” exercises or they might not even be identified as employees at all (i.e. independent contractors, who are liable for much of their own expenses and not privy to the same benefits). The pretense makes it that much worse.

Advertising: As Wynn defines it, the purpose of advertising is “to manufacture desires, which brands across the world spend nearly five hundred billion dollars a year doing.” In theory, if we are rational beings capable of making rational decisions in our best interest, as is an assumption of capitalism, we shouldn’t require such illogical pairings of, say, attractive women and luxury vehicles, or celebrities and expensive watches. That’s because the point of advertising in a capitalist system is not to satisfy existing needs, but to endlessly create new “needs,” leaving those original very real needs dangerously unfulfilled.

Inequality: Referencing BuzzFeed’s web series Worth It, in which Steven Lim and Andrew Ilnyckyj try more reasonably priced items against a vastly pricier counterpart to assess whether the high-end option is, as the name indicates, “worth it,” and putting a spotlight on Season 2, Episode 5, in which Steven and Andrew compare a $2.75 slice of pizza to a $2,000 24K-gold-covered pizza from Industry Kitchen comprised of various expensive items, Wynn highlights how by simply consuming the decadent choice, because they judge it to be inferior, this suddenly begins to weigh on their conscience. They feel, on some level, guilty for having been a part of consuming something of which the cost arguably could’ve been better used elsewhere.

As Wynn explains, morality has little to no bearing on this situation. Ilnyckyj and Lim are not bad people for eating a high-falutin’ pizza, nor are the makers of the pizza wrong for creating such a pricy entrée. It is, instead, the fault of capitalism that it fuels and makes so evident the divides in income and wealth inequality which promote feelings of guilt when the alternatives are juxtaposed together. Or, to phrase this in a concise philosophical argument:

Capitalism as we know it is a defective economic system, because, although it’s good at creating large amounts of wealth in an incredibly efficient way, it distributes that wealth in an incredibly inefficient way, where efficiency is understood not as the capacity to maximize total wealth but as the capacity to maximize human happiness.

This failure is therefore not necessarily a function of some dysfunction or inability on the part of those most disenfranchised by capitalism’s elaboration, but rather a systemic flaw.

Money buys happiness…but only to an extent

Within the American economic system, more income yields more happiness, presumably because individuals/their families have enough money to meet their basic needs and can live more comfortably. At somewhere between $65,000 to $95,000 a year, however, the reported happiness benefit plateaus.

According to this interpretation of socioeconomic data, then, the stark difference between the mean income (about $72,000, within the plateau zone) and the national median ($59,000, below the plateau zone) is vaguely startling, at least as far as the goal of maximizing happiness through the economy goes. Moreover, the top 1% of American earners make more than $389,000, well beyond the upper limits of the plateau zone. What good does that serve them or us?

To Wynn, what’s particularly galling for lower-income families is not just that they have trouble making ends meet or have to worry about money/what to sacrifice, it’s that they have to do so knowing full well there are other Americans who are obscenely rich. Their eventual anger, which she likens to the kind felt at the peak of the French Revolution, would therefore be justifiable.

This analysis comes from one person, who while being humorously self-deprecating about her acumen, is yet an ex-academic who describes herself as a “dumb-dumb” who “likes shiny things.” This is to say that while she did her research and presented her viewpoints in a very entertaining way, she is not an expert in this subject matter. Yet armed with a group of economists who specialize in researching and addressing widening equality, who knows what else we could throw alongside Wynn’s content. 40 minutes? Maybe 400 minutes is more appropriate given the potential complexity of this topic.

Capitalism, you’re getting off easy here.

For those of us sold on the perils of capitalism either as a result of Natalie Wynn et al.‘s discourse on the subject or based on our own feelings of dissatisfaction and alienation within a capitalist society, it is clear what the problems are, but not necessarily how we move past them. As Wynn indicates, the conditions for socialism to take root in the United States would require a failure of the current system. At the very least, that will take time.

In the interim, Wynn largely demurs on the actions she prescribes for her viewers to take to comic effect, suggesting among other things that we eat more vegetables, try not to be manipulated into waging war against other downtrodden people, tweet radically, vote Labour, and not cede more power to “the absolute worst dingbats our society has to offer.” Ultimately, she yields to the call to arms of Tabby, a cat-woman radical and one of her videos’ list of personas (fur-sonas?), who seeks to smash her way to revolution. Catgirls of the world unite! The idea has appeal, if for no other reason than the patent absurdity of it all.

I would submit that amid taking actions to benefit the planet and the world’s huddled masses yearning to breathe free, we should also keep conservations going about the long-term viability of our society as is and how well each of us are doing (or aren’t) within the confines of a capitalist framework. In my relatively short life span, I have witnessed a global financial crisis and the ensuing recession. Despite our apparent current economic fortune, there’s reason to fear we could be headed there again. An ongoing trade war with China. Widespread accusations of currency manipulation of allies and rivals alike. A slowdown in world trade across continents. And we still haven’t felt the full force of the GOP tax cuts or realized their implications. In other words, there are plenty of reasons to fear another recession, and Donald Trump’s White House is a key player in all of this.

Relatedly, and with a nod to Trump loyalists who have stuck by him amid the disarray, I urge his supporters and others sympathetic to his cause to think about, beyond his positions on immigration and other social issues, just how much they’re getting as a function of his presidency. You may have faith in him despite misgivings about his bully mentality, his fascist leanings, his misogyny, racism, transphobia, and xenophobia. Hell, you may actually like these things about him, and if you made it this far, thanks for reading. I’m not sure why you did, but thanks.

When it comes down to it, however, if you and your bottom line are what primarily concern you, keep thinking about what President Trump and the GOP are or aren’t doing for you. You probably are already watching the markets. But keep the tax cuts in mind and how you have benefited, if at all. Or how trade wars, which Trump boldly proclaimed are easy to win, may actually be hurting you when you’re picking up the tab. Or why, despite all the promises you’d be “winning,” things feel pretty much the same as before, if not worse. Barack Obama’s shift in the Oval Office is over, and when Republicans start coming for your social safety net to try to make up for their shitty policy goals, you won’t be able to blame him for it. Not terribly sincerely, in any event.

And by all means, amidst the doom and gloom depicted by conservatives and centrists alike about socialism, consider whether it is vitally important that we live in a world of unfettered capitalism. An end to capitalism wouldn’t mean an end to your ability to enjoy stuff as you might in our present materialistic society. It would, meanwhile, signify a shift away from a system that prizes profit over people and seeks to make money rather than satisfying human needs and happiness. Whether by regulating capitalism more heavily or by transitioning away from it, that seems like an end result worth striving for.

In a Growing Economy, Why Are Workers Falling Further Behind?

dnc_lol — Democratic National Committee chair Tom Perez spearheaded a resolution to allow fossil fuel PACs to donate to the Democratic National Committee, a reversal of a June vote banning such contributions. Despite the notion this is meant to be a defense of union workers, activists and other advocates have recognized this as an excuse to allow fossil fuel executives to donate and buy influence within the Democratic Party. (Photo Credit: Gage Skidmore/Flickr/CC BY-SA 2.0)

Jobs, jobs, jobs! Growth, growth, growth! Winning, winning, winning!

That’s the story we get from our beloved president, Donald J. Trump, at least. As many of us can attest to, though, what he says may not be (or is rarely) the gospel truth.

In an August 13 post in his nascent online newsletter, Popular Information, journalist Jedd Legum discusses how, indeed, GDP growth is strong and unemployment is low. Sounds great, right? While not to discount these trends, the issue is that wages aren’t rising to accompany them. Legum writes:

There is something fundamentally broken about the United States economy and no one is doing anything about it.

Unemployment is low. GDP growth is strong. But official government data released on Friday show that real wages for American workers have gone down over the last year.

Nominal wages, the dollar amount workers see in their paychecks, have slowly crept up, increasing 2.7% between July 2017 and July 2018. But that has not kept up with inflation, which rose 2.9% over the same period.

The economy is growing. Workers, however, are falling further behind.

This sounds awfully doom-and-gloom coming from Legum, but as he indicates, he has the data provided by the Bureau of Labor Statistics to back him up. What’s more, he identifies key reasons why workers aren’t reaping the benefits of a robust economy through their take-home pay.

First of all, before we get to why wages are stagnant or declining, there’s the matter of the Trump tax cuts. After the Tax Cuts and Jobs Act was signed into law, the White House promised that “the median U.S. household would get a $4,000 real income raise.” That hasn’t happened, though.

To make matters worse, Trump and his advisers are apparently not interested in revisiting their policies to assess their potential flaws. Instead, Trump has—in characteristic fashion—doubled down on his assertions. He has ignored any evidence to the contrary, boasting that our paychecks are bigger and America is booming like never before. That’s especially not true in the case of our “booming” nation, but why let facts get in the way of a good story?

As Legum is keen to point out, however, trends in wage stagnation relative to inflation are bigger than Donald Trump. (But shh—don’t tell Trump that. In his mind, he is the sun around which we revolve.) Regardless of who is president or which party is in power, wages have been effectively stagnant for decades.

Based on this phenomenon, Legum insists that if people are complaining of an economy “rigged” against them, they are, well, right. Despite America’s status as one of the richest countries in the world and in an era of increasing profits, fewer people are enjoying those additional rewards. Cue the conversation about the 99% versus the 1%.

Accordingly, as Legum asks in his introduction, what gives? The answer is a complicated one, though there are some major culprits in the eyes of economic analysts. The first is employer-based health insurance, of which costs are on the rise. Because of escalating health care expenses, employers are less likely to raise wages. Because they are concerned about coverage and costs, employees are less likely to seek employment elsewhere. Consequently, employers are less inclined to negotiate on wages for fear of a departure. It shouldn’t surprise you to know that lower-wage workers also are disproportionately affected by these rising health care costs.

Speaking of negotiating for higher wages, a decline in union membership mediated by deliberate attempts to undermine organized labor has weakened the bargaining power and wages of union and non-union workers alike. Without significant union membership, there is insufficient reason for non-union employers to raise wages to compete with those of union firms. This is to say that it is not a zero-sum game involving the wages of union and non-union workers.

Compounding the problem of wages in America is that productivity is lagging despite advancements in technology. Legum speaks to the theory that American companies are simply not investing enough for the long term, instead opting to turn revenues into dividends or stock buybacks that inflate stock prices. Meanwhile, as he also indicates, wages have increased more slowly than productivity, so this is “only a piece of the puzzle.”

All of these factors lead up to Legum’s central point. While wage stagnation is obviously complex, there are yet remedies which can be effected. On the health care front, Medicare-for-all and other single-payer models at the state level have been suggested as ways to make employer costs more manageable. For unions, there are possible interventions like majority sign-up or multi-employer bargaining. For productivity’s sake, where private organizations fail, public investments in infrastructure can help pick up the slack.

The problem with these remedies is that they aren’t being implemented, or as Legum puts it, “no one is working to fix the problem.” Re the Trump administration, in many cases, these solutions aren’t just being ignored—they are forsaken for policies that deliberately move us backward.

We all remember the attempts by the president and a Republican-led Congress to kill the Affordable Care Act. They haven’t yet proven wholly successful, though this doesn’t mean the GOP will stop trying. Trump also celebrated the ruling in Janus v. AFSCME, characterized by many as a major blow to public-sector unions. As for infrastructure, Trump promised it would be a priority of his tenure in office. Heretofore, like most of Trump’s promises, it has yet to come to fruition.

In closing, Legum writes, “Politicians of all stripes speak incessantly about the American worker. But until they tackle the wage crisis head-on, it’s hard to take them seriously.” The absence of references to a specific political party here implies that both Republicans and Democrats should be taken to task for their role in subverting the wage growth of the labor force in the United States.

For the GOP, which has long kept the interests of big business close to heart, this is no big surprise. On the other hand, for the Democrats, the putative party of the people, the charge is that they have failed workers by not more vigorously defending organized labor, not to mention too eagerly embracing corporate lobbies/wealthy donors and their influence. This is the sort of inaction from lawmakers that the average voter is arguably justified in raging against. With the criticism from the left, there is an added sense of disappointment that a party which traditionally has embraced working-class Americans appears to have so readily abandoned them.

As Judd Legum underscores, these trends which have contributed to wage stagnation amid a growing economy were in motion before the rise of Donald Trump. His ascendancy is perhaps an all-too-logical consequence of their elaboration. As numerous publications and pundits observed, working-class whites, who came out in force for the business tycoon in 2016, were a key source of his support.

Before the election, the voting bloc of whites without a college degree was reportedly shrinking, and polling data had Hillary Clinton with one foot in the White House. Meanwhile, a group of individuals who disdain professionals because they perceive themselves to be disdained, while holding fast to the aspirational model embodied by Trump, was instrumental in swinging the election to the Republican presidential nominee. If Democratic strategists were convinced they could all but ignore this subset of the electorate (and key segments of the Rust Belt), it turned out they were wrong.

It’s political realities like this which make the recent decision by Tom Perez and the Democratic National Committee to reverse a ban on donations from fossil fuel companies rather alarming. Ostensibly, this was a move made because input from labor suggested a ban on fossil fuel money was an “attack” on workers. In reality, and as the activist community has observed, this 180 is designed to allow fossil fuel executives to keep donating to (and buying influence within) the Democratic Party.

The DNC’s about-face is particularly galling given that the prohibition on fossil fuel contributions—which specifically targeted corporate PAC donations—only came about this past June. Defenders of Perez’s proposal might be wont to point out that the Republican Party accepts substantially higher amounts of cash from the fossil fuel industry than the Dems do. There’s also the aspect that Democrats in contested districts/states feel they need to take a more moderate stance when it comes to energy production.

Still, as Kate Aronoff, contributor to The Intercept, quipped, “There are no jobs on a dead planet.” The DNC’s recommitment to an “all-of-the-above” energy strategy is a regressive turn of events at a time when more urgent action on climate change is needed, and when the Trump administration is doing its part to reverse as many regulations designed to safeguard the environment as possible (see also Scott Pruitt as the original pick for the EP-freaking-A).

Moreover, the rationalization of taking fossil fuel PAC money as a defense of organized labor is an altogether cynical one. Apparently, being a rank-and-file worker/Democratic Party supporter and having enthusiasm for an energy plan based on renewable sources are mutually exclusive. If you care about your job, evidently you give f**k-all about the planet.

To reiterate, the problem of stagnant and declining wages in America is a complex one mediated by a number of factors. At the same time, a little leadership from our elected representatives could go a long way in convincing us we are on the right track in trying to ameliorate the situation. Unfortunately, legislative gridlock and intentional concessions to corporate interests inspire little confidence we’re moving in the right direction on this issue.

It’s 2018, and CEOs Are Still Saying Very Dumb Things

what_the_zuck — For the love of God, Mark Zuckerberg, don’t try to defend the intent of Holocaust deniers. (Photo Credit: JD Lasica/Flickr/CC BY 2.0)

In an era in which companies and their executives are under more scrutiny than ever, and when a climate of political correctness beckons accountability for every faux pas uttered—deservedly so, I might add—it is yet astonishing that corporate leaders continue to make very public statements that espouse very dumb viewpoints. As tends to be the case, these officers are public faces for their organizations, if not namesakes. In the name of protecting their brand and avoiding bad optics, one would think these influential figures would make it a priority not to do or say anything that could generate negative publicity.

Of course, it may simply be that these individuals can’t help themselves. While not a chief executive, Roseanne Barr ran into this situation recently when, not long after a successful reboot of her eponymous ABC show got underway, she went and blew up her opportunity by tweeting disparaging comments of a racist and Islamophobic nature about Valerie Jarrett, businesswoman and former Obama White House official. Essentially, all Barr had to do was not make disgusting remarks like the one that got her show canned. And yet, she felt compelled. The real downside of this, as some might argue, is that a show with working-class appeal that could have helped further a discussion about race and politics in this era was cut short. For Roseanne’s sake, few but her staunchest defenders were sympathetic.

To be fair, and while not to in any way excuse likening a black person to an ape, it’s often in a comedian’s job description to say things that are off-color or to behave in somewhat of a subversive way. With CEOs, however, it is not, and this what makes their lapses particularly alarming. Granted, they might not be particularly well-versed in the intricacies of HR guidelines and PR campaigns. Still, given their prominence within their organizations—frequently accompanied by a salary and benefits that more than compensates them for their time, effort, and expertise—one would think they would use the resources at their disposal to better guard themselves against negative outcomes. Or better yet, rely on their business savvy and common sense.

Instead, we get John Schnatter, the founder of Papa John’s Pizza, dropping an N-bomb during a company conference call. Schnatter did own up to using the epithet following reports of this incident, if we are to give him any semblance of credit, and there was a context to his utterance of the slur—though even with this in mind, he probably could’ve done without it.

The problem with this context is that it doesn’t make Schnatter seem any less reprehensible. His employ of the term occurred when trying to make an analogy about his criticism of the NFL and Commissioner Roger Goodell in failing to adequately address player protests of the National Anthem (specifically, as a problem to be “nipped in the bud”) and hurting the company’s bottom line versus Col. Sanders, iconic founder of Kentucky Fried Chicken, using the epithet in his own right. As Schnatter seemed to suggest, there was a measure of unfairness about him being singled out for his criticisms of the NFL while Sanders didn’t catch the same flak.

This comparison is a problematic one for multiple reasons. For one, while any deep-seated prejudices held by Harland Sanders’s can only be guessed, and while he may have been slow to adopt less offensive terminology for African-Americans or even contributed to the likes of pro-segregation presidential candidate George Wallace, his use of that word appears largely based on conjecture. Besides, trying to exonerate yourself by contrasting your actions with those of a man who dressed like a plantation owner through the Jim Crow era isn’t exactly a terribly high bar to clear. More than a quarter-century after Sanders’s death and in an age in which corporations are more cognizant than ever about their public image, this much should be more or less an afterthought.

It should be stressed that John Schnatter stepped down as CEO back in December after the backlash he and Papa John’s received following his comments about the NFL and player protests, so technically he is no longer serving in that function. In the wake of his more recent admission of using the N-word, Schnatter has also resigned as chairman. Although now he considers resigning a mistake. And the remaining board members have adopted a “poison pill” provision to try to avoid attempts by Schnatter to make a power play and reclaim his position atop the board. Simply put, it’s a mess, one that may have predated these controversies, but one which was magnified by them.

You may or may not have high regard for the Papa John’s product. I live in an area in which there is no shortage of local pizzerias, let alone Domino’s and Pizza Hut, so I personally could take or leave it. Regardless of one’s judgment of Papa John’s taste and overall quality, with over 4,500 locations worldwide, it’s not as if one can easily dismiss the restaurant chain. With other companies related to technological advances, there is perhaps a greater sense of demand or interest based on the novelty of their goods or services. This not withstanding, they too are subject to their founder/CEO going rogue in an era and in industries where public perception arguably should dictate more responsible behavior.

Mark Zuckerberg, fresh off a very public scandal involving the possible exposure of up to 87 million Facebook users and their data to the political consulting firm Cambridge Analytica, recently was interviewed by Kara Swisher of Recode fame, and while the interview touched on a number of different topics, on the subject of whether or not conspiracy theorists like Alex Jones should have a platform, Zuckerberg said something rather befuddling about Holocaust deniers and whether they deserve to be banned. The relevant segment of the interview, as copied from the transcript:

Okay. “Sandy Hook didn’t happen” is not a debate. It is false. You can’t just take that down?

I agree that it is false.

I also think that going to someone who is a victim of Sandy Hook and telling them, “Hey, no, you’re a liar” — that is harassment, and we actually will take that down. But overall, let’s take this whole closer to home…

I’m Jewish, and there’s a set of people who deny that the Holocaust happened.

I find that deeply offensive. But at the end of the day, I don’t believe that our platform should take that down because I think there are things that different people get wrong. I don’t think that they’re intentionally getting it wrong, but I think-

In the case of the Holocaust deniers, they might be, but go ahead.

It’s hard to impugn intent and to understand the intent. I just think, as abhorrent as some of those examples are, I think the reality is also that I get things wrong when I speak publicly. I’m sure you do. I’m sure a lot of leaders and public figures we respect do too, and I just don’t think that it is the right thing to say, “We’re going to take someone off the platform if they get things wrong, even multiple times.” What we will do is we’ll say, “Okay, you have your page, and if you’re not trying to organize harm against someone, or attacking someone, then you can put up that content on your page, even if people might disagree with it or find it offensive.” But that doesn’t mean that we have a responsibility to make it widely distributed in News Feed.

Swisher makes an all-too-valid point, as the majority of us would agree. Sandy Hook was not a hoax. There is no debating the merits of whether it happened or not. The same goes for the Holocaust. There simply is no place in regular discourse for litigating its legitimacy. Unless you are, say, a child who is just becoming able to comprehend what the Holocaust was and the devastation it wrought, any meditations on the intent of deniers is ridiculous. They intend to deny these events as a function of their anti-Semitism. There’s no leeway here.

Zuckerberg would soon after E-mail a clarification to Swisher about how “deeply” offensive he finds Holocaust denial and that he “absolutely didn’t intend to defend the intent of people who deny that.” But, Mr. Zuckerberg, Mark, if I may—you pretty much just defended it by saying it’s hard to “impugn intent.” It’s like President Donald Trump saying there was room for blame “on both sides” related to the unrest and violence in Charlottesville after a group of white nationalists rallied. When there are Nazis holding freaking torches, you disavow them. This is basic stuff.

In Zuckerberg’s case, he made comments that, at best, signify he is out of touch with the impact Facebook has and how it can be used to influence people to join in destructive causes. At worst, they signify that he understands this impact full well, but he and his company are actively choosing not to censor dangerous content because it affects the company’s bottom line.

Mark Zuckerberg isn’t the only high-profile tech-oriented CEO to meet with criticism, only to take his foot and jam it squarely into his mouth. For the longest time, Elon Musk and Tesla Motors have seemingly gotten a free pass from news media because their product is not only sleek and sexy (and hella expensive), but lends itself to optimism about a future in which electric cars have greatly reduced our consumption of fossil fuels and autonomous driving can reduce costs and fatalities in vehicle crashes.

More recently, however, as Tesla has tried to produce its vehicles on a larger scale, it has met with production delays and quality issues, not to mention a well-publicized death involving the use of autonomous vehicle technology and concerns about injuries at company facilities being underreported. Understandably, the organization has received a fair amount of negative press in this regard, and Musk has taken it upon himself to criticize the media and even suggest creating a service by which users can assess the “core truth” and “credibility” of editors, journalists, and publications.

Musk isn’t entirely out of bounds with his defensiveness in the face of criticism at the hands of major media outlets. This is to say that, when the demand to generate clicks or potentially to satisfy corporate donors within the fossil fuels industry is ever-present, coverage of Tesla Motors’s doings can easily be skewed. Going after Reveal, a publication by the non-profit Center for Investigative Reporting, meanwhile, for a story about the aforementioned workplace safety concerns at Tesla and labelling them an “extremist organization” carries less weight, and connotes a sort of thin-skinned petulance, if not signaling a rising desire among corporate and political leaders to intimidate or invite violence against journalists who don’t play nice for the sake of playing nice.

Musk caught flak again when he volunteered a child-sized submersible in the midst of the rescue of the Thai soccer team cave rescue that drew a worldwide audience. Right then and there, the Tesla CEO merited criticism for offering a solution based on an incomplete understanding of the logistics of the rescue, an act many saw as a PR maneuver designed to distract from his company’s failings of late. When Vern Unsworth, a British diver involved in the rescue, was asked about Musk’s “contribution,” he panned it, saying that it had “no chance” of working and that Musk could kindly “stick it where it hurts.”

Musk, because he is a CEO of a major corporation and highly attuned to the workings of social media, took this comment in stride. Kidding! He promptly tweeted and called Unsworth a pedophile, and then apologized for calling him a pedophile—while at the same time justifying his defensive snipe based on Unsworth’s “several untruths” and because the diver told him his idea was terrible.

That’s the kind of thing you shouldn’t say even if you’re not the face of Tesla Motors—and if you are, all the worse. Musk should know better than to throw a hissy-fit over Twitter. And yet, he doesn’t, or at least didn’t. If his apology is any indication, he’s sorry only because it brought him and Tesla more bad press, not because he’s genuinely contrite about making callous, unjustifiable accusations about a man trying to rescue young children.

What’s so unsettling about the awful words of Elon Musk and the above-named individuals is that they are accompanied by a lack of true remorse and/or excuses for their questionable choices. Roseanne Barr claims she didn’t even know Valerie Jarrett was black when she made her infamous comment, and that it was her vote for Donald Trump which doomed her show. John Schnatter, already in the habit of making excuses by blaming the NFL for lower earnings, has tried to justify his use of the N-word on the basis that he didn’t use it as a slur. Mark Zuckerberg professes he never meant to defend the intent of Holocaust deniers—except he totally did. These explanations ring hollow, and arguably exacerbate the controversy in each case. Don’t try to hedge. Just admit you messed up, say you’re sorry, and hope that people will forgive you.

Likewise disconcerting is the idea that these antics either have or continue to run the risk of overshadowing a great product. What’s more, if there is a lesson to be gleaned from the #MeToo and Time’s Up movements, it’s that no one should be considered impervious to consequences for their actions. Whether the damage people like Kevin Spacey and Louis C.K. have done to their careers is truly long-term remains to be seen, but either way, theirs is not the kind of potential damage to one’s brand and career that one wishes to invite. In a day and age when corporate social responsibility is more than a passing concern and when privacy seems to be on a continuous decline, the same can be said for the likes of Musk, Schnatter, and Zuckerberg.

On the Decline of U.S. Manufacturing (and No, It’s Not All About Automation)

Bethlehem Steel — While automation is widely believed to be the key to manufacturing job losses in the United States, more recent research suggests globalization and practices by competitors like China have made more of a difference than otherwise might have been believed. (Photo Credit: Joshua Schnalzer/Flickr/Creative Commons

Ready for a deep dive into economic trends and theory facing the American manufacturing sector? I get it—the topic may not be an altogether sexy one—but the implications that accompany these trends are important ones, so bear with me for a bit.

Gwynn Guilford, reporting for Quartz, recently penned an excellent analysis of the United States’ effective stagnation when it comes to growth in the manufacturing sector, an eventuality that even trained data-driven economists have misinterpreted by viewing manufacturing more holistically. She begins her piece by talking about Donald Trump decrying globalization as a job killer on the campaign trail, and this being dismissed by economists and other data-driven analysts as rhetoric in favor of automation as the dominant explanation for job loss in the States.

As Guilford tells it, though, Trump was closer to the truth than a lot of experts might otherwise have entertained—though for reasons he likely can’t iterate, so let’s not give the Devil too much of his due.

First, a matter of context. According to Guilford, who cites data from the Bureau of Labor Statistics, manufacturing employment has declined by more than 25% since 2000, to the tune of some 20 million jobs. At the same time, however, the manufacturing sector’s output has continued to increase despite the job loss, roughly in line with growth in the U.S.’s gross domestic product (GDP). The easy explanation for this is that advances in management, skill, and—you guessed it—technology have made manufacturing processes more efficient, yielding superior output and production when adjusting for inflation.

True as these justifications for industrial improvement may be, though, there is still the matter of the paradox created with respect to rising output and concomitant declining employment in the manufacturing sector. Here’s where the economic theory comes into play. Susan Houseman, economist and specialist in matters of globalization, in conjunction with Federal Reserve economists, looked at detailed statistics regarding calculations of manufacturing output.

As Guilford explains, integral to understanding what Houseman and her colleagues saw is how economists assess year-to-year measurements. Not only do they look at the raw numbers of finished products made from one period to the next minus the costs of production (a principle known as “value added”), but they adjust for changes in price and product quality. The problem with measuring things in this way, meanwhile, is that adjustments based on assumptions of value can be misinterpreted as or otherwise confounded with sales data, making it seem as if the country is selling more goods than it actually is.

As Houseman et al. contend, this is precisely what’s happening with the consensus analysis of the U.S. manufacturing sector, and one relatively small subsector is skewing the observed data: computers. The evidence of this is alarming when controlling for the computing industry in plotting private industry and manufacturing growth over time. Between 1947 and 1977, graphs of statistics recorded by the Bureau of Economic Analysis show growth of manufacturing and private industry largely in step, on a steady incline. From 1977 on, however, taking computers out of the manufacturing equation creates a stark downward departure for the Manufacturing, Less Computers line. As Guilford puts a cap on this, “By 2016, real manufacturing output, sans computers, was lower than it was in 2007.”

In other words, the health of the American manufacturing sector looks to be dangerously overstated, and while automation did, of course, occur here, Guilford points to evidence that globalization and trade may have done more damage than previously considered. In this regard, China, a frequent target of Donald Trump’s as he stumped for votes, indeed plays a central role.

China’s emergence as a major exporter of goods is estimated by one group of economists as costing America over 2 million jobs from 1999 to 2011, helped by competitive advantages in the form of artificially devalued currency and cheaper labor, and exacerbated by the strengthening of the U.S. dollar, which reduced the demand for American exports. But American leadership is not without its culpability herein. As economists Justin Pierce and Peter Schott argue, China’s joining of the World Trade Organization as a member in 2001 negated the ability of the U.S. to retaliate against Chinese currency manipulation and other protectionist policies, a situation Bill Clinton, among others, encouraged as President of these United States.

In addition, going back to the notion of automation as a job killer, there are some logical flaws in the emphasis on this cause being a primary driving force. For one, as Guilford bluntly puts it, robots “have to work somewhere.” Given the statistic that more than 75,000 manufacturing plants in the U.S. closed between 2000 and 2014, for overall manufacturing output to increase, other factors would have to be at play. There’s also the matter of the United States lagging behind other developed nations such as Korea, Singapore, Germany, and Japan in terms of use of robotics. The numbers, as they say, don’t add up.

Thus, if anyone or anything should get a wag of the finger, according to Gwynn Guilford, it’s “two decades of ill-founded policymaking,” the kind that “put diplomacy before industrial development at home, offering the massive American consumer market as a carrot to encourage other countries to open up their economies to multinational investment.” In doing so, we as a nation dismissed the threat of foreign competition and accepted (and continue to accept) the popular narrative that automation was and is the major driver of job extinction.

What’s particularly problematic about this mindset is that it obscures the importance of manufacturing to the U.S. economy and as a provider of skills to American workers. With production facilities closing their doors, there’s less incentive to do the kind of research and development that leads to better, more competitive products. As you might expect, too, the brunt of the costs of manufacturing’s decline outside of the computing subsector have been borne by the middle class, while the lion’s share of the benefits of globalization have been reaped by the so-called urban professional elite and multinational corporations.

In turn, politically and socially speaking, the country has become increasingly unequal and more polarized. All of these elements suddenly seem tailor-made for Trump and his faux populism to swoop in and capture an upset victory like he did in the 2016 election. The man struck a nerve in the heart of blue-collar America. Predictably and unfortunately, though, he hasn’t done much to boost U.S. manufacturing, instead focusing on tariffs and pushing the nation to the brink of a trade war with any number of entrants willing to fight back, and ignoring the currency manipulation angle that validates, in part, his anti-China tirades. Not that this exculpates the Democrats, either, whom Guilford characterizes as possessing “no vision for how to reverse the industrial backslide.”

All of this paints a fairly grim picture of the outlook for the manufacturing sector moving forward, as it does for the country’s susceptibility to divisive rhetoric and strongmen like Trump. To quote Guilford in closing:

US leaders’ longstanding misunderstanding of the manufacturing industry led to the biggest presidential election upset in American history. But they still don’t seem to grasp what’s been lost, or why. It’s easy to dismiss the disappearance of factory jobs as a past misstep—with a “we’re not getting those jobs back” and a sigh. Then again, you can’t know that for sure if you never try.

It’s one thing for political leaders, often derided as out of touch with John and Jane Q. Public, to misunderstand the issues about which they profess to know—assuming they ever understood in the first place. When economic analysts are falling prey to the same faulty reasoning, however, it doesn’t instill a great deal of confidence in those of us less well-versed in such matters. The most inspiring sentiment here is Guilford’s seeming doubt about whether or not the jobs we take for granted are really lost for good, that we don’t know for sure one way or another. Then again, we have to try first, and based on the current state of affairs, that’s no guarantee.

Considerations of the stagnation of American manufacturing accompany this week’s not-so-great news for workers amid an ongoing assault on workers’ rights from the political right. In a 5-4 decision that saw conservatives comprise the majority, the Supreme Court ruled that employers can compel their employees to sign arbitration agreements in which they waive their rights to bring class-action suits against the employer. Justice Neil Gorsuch, while indicating this practice of company management is “debatable,” nonetheless found that federal arbitration law does not conflict with the National Labor Relations Act, a piece of legislation in place since 1935 governing the rights of employers and employees alike, and designed to protect the ability of the latter to collectively bargain and form trade unions.

Justice Ruth Bader Ginsburg, meanwhile, speaking in dissent, was unequivocal in her negative assessment of the ruling, calling it “egregiously wrong,” and offering these additional sentiments on the matter:

The court today holds enforceable these arm-twisted, take-it-or-leave-it contracts—including the provisions requiring employees to litigate wages and hours claims only one-by-one. Federal labor law does not countenance such isolation of employees.

As the “Notorious RBG” finds, these agreements are evocative of the so-called “yellow dog” contracts used by employers until being outlawed in 1932 that barred workers from forming or participating in unions as a condition of employment. Now more than 85 years removed from a legislative remedy to such lopsided bargains, to know that we are potentially moving backward on the subject of workers’ rights is frightening.

Ginsburg isn’t the only one painting this decision in such ominously historical terms either. While the Court didn’t specifically address discrimination in the workplace with this ruling, civil rights advocates have expressed their fear it will set a precedent that will allow employers to skirt their responsibility with respect to claims of discrimination and harassment in the workplace. Add to this fears that a conservative majority ruling in Janus v. AFSCME could strip unions of their ability to collect “fair share” fees from non-members who nonetheless benefit from union representation, and there is any number of reasons for concern for the fate of American unions and the imbalance of political power fueled and perpetuated by moneyed interests.

As with intervening to attempt to save manufacturing jobs, the impetus should be on lawmakers and the country’s leadership to steer the nation in the right direction on upholding workers’ rights, a point Ruth Bader Ginsburg emphasized in her dissent. At least as long as Republicans control both Congress and the White House, however, any pushback on efforts to undermine organized labor appears unlikely, especially while establishment Democrats fail to rise more strongly to its defense until it’s time to campaign—and even then there are failings, as the story of Hillary Clinton’s 2016 electoral loss demonstrates. A year-and-a-half after the fact, one is left to wonder what lessons, to be exact, the Dems have learned from their defeats of previous years.

Donald Trump was closer than he probably realized to the truth about China’s role in the United States’ manufacturing woes, and it got him to the White House. Until we as a nation get better at diagnosing this reality and abandoning the “robots took our jobs” narrative, crafting proactive-minded policy to adapt to the challenges of a global market, and ensuring that workers can organize and advocate for better wages and working conditions, we run the risk of similarly unqualified candidates taking advantage of the unrest that is apparent in teachers’ strikes and other walkouts which are happening, have happened, and will continue to happen—not to mention continued efflux of research and development skill, factory closures, and job loss.

On the surface, American manufacturing looks to be growing as it has in past decades. A deeper dive into the numbers, though, tells a more complete story—and one that doesn’t obviously lead to a happy ending. Let’s hope we as a country realize this before it’s too late and we fall too far behind on the world stage.

To view this post as it appears on Citizen Truth, click here. Citizen Truth is an independent and alternative media organization dedicated to finding the truth, ending the left-right paradigm, and widening the scope of viewpoints represented in media and our daily conversations. For more on CT, please visit citizentruth.org.

The Non-Apology Apology Is Alive and Well at Wells Fargo and Facebook

wells_dry — Wells Fargo claims it wants to “earn back your trust,” but their actions and slick advertising campaigns suggest they are being duplicitous. (Photo Credit: Taber Andrew Bain/Flickr/Creative Commons)

Wells Fargo not long ago released a commercial titled “Earning Back Your Trust” that starts with a man on horseback riding in slow motion. The voiceover begins, “We know the value of trust. We were built on it.” The narrator then precedes to burnish the company’s credentials by talking about its history of transporting gold from the West, and that it built on the trust it engendered until it, well, lost its way.

Now, however, Wells Fargo is completely re-committed to its customers, and devoted to “fixing what went wrong.” It’s ending product sales goals for branch bankers. It’s holding itself accountable. “It’s a new day for Wells Fargo,” explains the narrator. “But it’s a lot like our first day.” Meanwhile, The Black Keys’ “Howlin’ for You” plays over the slickly-produced minute-long spot.

Ahem, pardon me if I seem unconvinced. Not only is the song choice a curious one—to me, it seems more befitting of a Budweiser commercial with some ruggedly handsome guy chatting up an equally telegenic twenty-something in a bar—but the ad’s tone also seems off. That is, it seems less of contrition, and more of self-congratulation, as if the company’s storied history more than makes up for any momentary ethical lapses.

But, oh, what an ethical lapse it was. Wells Fargo’s promotion of an aggressive sales-oriented culture was highlighted amid a yet-ongoing scandal involving fraudulent sales to unsuspecting customers, one that saw over 5,000 employees fired, the resignation/retirement of CEO John Stumpf, and over $100 million in fines assessed by the Consumer Financial Protection Bureau and other agencies.

Moreover, if recent events are any indication, the banking giant hasn’t learned its lesson when it comes to responsible selling practices. Reportedly, more than 550,000 Wells Fargo customers are believed to have been pressured into buying car insurance they didn’t need last year, 20,000 of whom are believed by the company to have defaulted on their car loans and had their vehicles repossessed as a function of the additional costs. This latest turn in Wells Fargo’s saga had the company potentially on the hook for an additional $1 billion in fines as of the time of this CNN report by Donna Borak and Danielle Bronner-Wiener. Noting the earlier allusion to the bar scene in reference to the “Earning Back Your Trust” commercial’s soundtrack, should we, um, just this put this on the company’s tab?

Two things are particularly striking about Wells Fargo’s ad. The first is that the company professes to be primarily interested in the consumer’s satisfaction, and seems content to hold itself accountable, but asking consumers to trust it to do so when it has violated this trust on a large scale is absurd. It’s like asking the fox to watch the proverbial henhouse, and it’s all but a slap in the face to those who were done financial harm or otherwise were put at risk by Wells Fargo’s sanctioning of a manipulative, underhanded sales culture. It’s why there is a Federal Reserve cap in place on the bank’s growth. Wells Fargo hasn’t proven it can hold itself accountable yet, so why should we take them at their word now?

The second is what’s not in the ad: anything resembling the phrase “we’re sorry.” By the end of the ad, Wells Fargo is pivoting to the future. It’s a new day. Cue images of a horse-drawn carriage surging ahead. Another slap in the face. We haven’t even begun to have the kind of conversation we should be having about your company’s malfeasance, but you’re ready to move on with bluesy rock anthems and images designed to sell even more of your products? Clearly, you don’t get it, and that comments are disabled for the YouTube version of this spot only further convey your tone-deafness. At the very least, you should want to hear what the average consumer thinks about your brand to know how far you need to go to repair your image. Evidently, you don’t want to know. You just want those earnings to hold.

Facebook, facing its own scandal involving the breach of the public’s privacy and trust, issued its commercial “Here Together.” The idea is the same. Once again, it’s about a minute in length, and is designed to remind you about what you loved about the company in the first place—to make friends, connect, and feel “a little less alone” (and maybe, er, stalk that cutie you met in your section of Expository Writing)—briefly acknowledge problems with clickbait, data misuse, fake news, and spam, swear the people running the company will do better, and pivot to the future. A future in which you presumably will continue to use Facebook, invest in it financially, and casually ignore that you have little to no idea about how it uses or sells your information. Again, no mention of being sorry. This whole breach of faith was just a hiccup, a bump in the road. And once again, comments are disabled. Facebook, you get a Dislike from me.

These responses to public outcries from Wells Fargo and Facebook are examples of the non-apology apology, an exercise in linguistics that offers the appearance of sympathy without any underlying genuine remorse, and perhaps even masking irritation at having to acknowledge the other party’s concerns. Both companies seem to indicate “mistakes were made,” but using the passive voice, so as not to implicate anyone specific. Let’s just leave it at that, shall we? Besides, isn’t the Wells Fargo mobile app great? Aren’t you excited that Facebook is planning to create a dating service? GET EXCITED, PEOPLE!

By this token, there is no real admission of guilt among the higher-ups at these companies. Any sense of regret, therefore, is in relation to getting caught, not with respect to betraying the trust of its users. What’s more, their sense of indignation likely reflects an understanding of their prominence. Wells Fargo is one of those financial institutions that easily falls under the heading “too big to fail.” Facebook is one of the preeminent social media apps/sites on the Internet and mobile devices, surpassed only by Google and YouTube in terms of popularity.

If the people scrutinizing their decision-making are lucky enough to fully comprehend what these businesses do—with Facebook, in particular, observers argued that senators charged with questioning CEO Mark Zuckerberg did not—there’s still the matter of how to truly hold executives accountable for failures within their organizations. John Stumpf, CEO of Wells Fargo when news of the scandal facing his company broke, retired and walked away with $134 million. And that’s without a golden parachute! His payout could’ve been that much higher had he been fired and given a severance package!

What’s upsetting about all of this is that Facebook and Wells Fargo, while particularly large and notable examples of it, are not the only perpetrators of public relations disingenuousness, a condition that transcends the corporate realm. Politicians and other public figures, for instance, are renowned for their proficiency with the non-apology apology. How many times have we heard the phrase “I’m sorry if anyone was offended by my remarks, but…”?

Implicit in this kind of statement is the notion that the problem may be on the part of the intended audience and not the accused offender, i.e. “you’re being too sensitive” or “you’re upset for some other reason.” You’re right, Mr. Senator, sir. Upon further inspection, I’m the asshole. Sorry for insinuating that the onus should be on the person making public comments in the first place and wasting your time.

If not making some half-hearted attempt to express regret for their actions and/or sympathy for victims and their families, public figures can claim to be transparent while throwing out false or otherwise misleading information. David Fleshler, reporter for the South Florida Sun-Sentinel, outlined in a recent piece how Broward County Public Schools, the school district under whose purview Marjory Stoneman Douglas High School falls, has repeatedly insisted that Nikolas Cruz, the shooter behind this tragedy, was never involved with what is known as the PROMISE program—but that this information is patently false.

Even if the PROMISE program, designed to keep at-risk youths from traveling along the school-to-prison pipeline, is somewhat of a red herring being pointed to largely by opponents of gun control, that the school district would knowingly obfuscate this element of Cruz’s history sends the wrong message about the administration’s reliability as a source of information for concerned family members and members of the Parkland community.

Other elements of the district’s interactions with the public of late have been similarly disturbing in their lack of transparency. Superintendent Robert Runcie has claimed that all of Cruz’s school records have been passed along to authorities, but a Broward County detective at a school safety meeting contradicted this assertion. The district has also refused to release any documentation related to these records, citing exemptions under Florida state law that do not apply to school boards, and understated how long Nikolas Cruz had been a student at Stoneman Douglas prior to his expulsion.

Runcie has additionally blocked his critics on social media and has dismissed reports that disagreed with internal accounts as “fake news.” These responses to public inquiries smack of a school district administration that is more concerned with its image than of allaying the doubts of interested parties, and even if its aims are more meritorious, its opacity creates its own set of problems.

Certainly, in financial/economic terms and in terms of the geographical spread of their influence, Wells Fargo’s and Facebook’s lack of transparency are more significant than that of Marjory Stoneman Douglas H.S. We’re talking millions of users/customers and potentially billions of dollars. That not withstanding, the handling of relevant information by the powers-that-be governing the latter is significant in its own right, owing to a similar perceived lack of empathy and trustworthiness at a place and time where gun violence cost 17 lives—on which you can’t put a price—and when the push for meaningful change on gun policy is so strong.

To be sure, the situation facing the school district is a difficult one. Robert Runcie and others don’t want the point about the need for gun control to get lost in the demand to know details about Nikolas Cruz’s life. To this end, that Cruz was able to buy a weapon legally is not to be diminished. At the same time, offering conflicting reports to families and the media, and restricting the flow of information altogether, exposes the district to all kinds of speculation about its culpability.

David Fleshler notes how the PROMISE program is “controversial” in that its critics argue that the program is too lenient with students, that the system can be “gamed” so that youths can commit offenses so as long as they don’t violate its principles and can time it to earn a clean slate the following year, and that it creates an unsafe environment for the other students in the classroom. Add to this the idea the school district did a poor job of implementing this program and/or tracking Cruz’s interaction with it (Cruz was referred to the program but never completed it), and the narrative of the shooting being primarily fueled by Runcie and Co.’s incompetence as well as the school’s preoccupation with its image becomes that much more compelling—fairly or unfairly.

Superintendent Runcie’s public comments haven’t done much to assuage these concerns either. In a version of the non-apology apology, when asked about why the school district had to backtrack on the assertion that Cruz was never a part of PROMISE, Runcie appeared to accept responsibility (“I’ll take the blame for that”), only to say that he was “conveying what information [he] had received from staff internally, and that’s where we were at that moment in time.” So, wait, it’s the staff’s fault?

As for why he would release incomplete research into Cruz’s history, Runcie replied that he couldn’t tell the media and the public to “wait ’til June when we get our complete investigation done, because there’s a level of impatience out there.” So, wait, it’s the fault of the media and the public for being impatient? Sorry all those kids inconveniently got shot and made you have to do your job, Mr. Runcie.

At the end of the day, the failure of Broward County Public Schools to respond adequately to requests for more information, and to acknowledge more plainly that it failed Nikolas Cruz and his victims, may be, as it is with Facebook and Wells Fargo, about numbers more than people. The PROMISE program, for its good intentions, can have the effect of discouraging communication between schools, law enforcement, and public health agencies, such that touted statistics on lower incarceration rates belie the real danger communities still face of children like Cruz falling through the cracks, so to speak.

And then, of course, there’s the matter of funding. Supt. Runcie has been very vocal about the lack of funding for his school district, the sixth-largest in the nation, as a subset of Florida’s already-low funding compared to the national average (according to Runcie, the Sunshine State ranks 44th nationally in this regard), and recently, the Broward County school board approved a proposal for a homeowner tax increase designed to generate another $93 million to this cause to be voted on later this year.

As legitimate as these needs may be, though, it’s admittedly a tough sell for voting taxpayers when the district’s administration appears less than forthcoming and there are serious questions about how key programs at its schools are being implemented. Plus, from everything I’ve read, there’s no mention at being “sorry” about all the misdirection—not that you’d expect different at this point.

When it comes down to brass tacks, if you’re dealing with any of the aforementioned parties, you’re submitting to some sort of a trade-off. With Wells Fargo, you’re getting the convenience and relative safety (at least compared to smaller financial institutions) of a big bank. You’re also subjecting yourself to the risk that one of more its employees will try to sell you something you don’t need—perhaps without your knowledge, no less. With Facebook, you’re getting the ability to connect with people, share content, and even market a business. You’re also likely giving the social media platform wide latitude to share your information with third parties and to target you based on your identifying characteristics.

As for Broward County Public Schools, reportedly, some of its high schools rank among the best in the nation, including two in the top 500 (Pompano Beach H.S. and Cypress Bay H.S.) and six in the top 1,000 (such as Stoneman Douglas). Whether they are among the safest, however, is obviously a point of contention, and two parents of students slain in the shooting, Lori Alhadeff and Ryan Petty, are running for school board seats in part because of their dissatisfaction with the school district’s perceived lack of accountability, safety, and transparency.

While certainly, criticism of Supt. Robert Runcie and of the PROMISE program on a national front has been particularly strong from conservative publications, Alhadeff is a registered Democrat, and Petty is a Republican. There is room for concern on both sides of the political aisle, especially for those close to the victims of tragedies like the one in Parkland, Florida. Not that it should be welcomed, but death can affect one’s perspective on matters such as these.

Then again, if we’re viewing things in a simplistic and pragmatic manner, what doesn’t possess some form of trade-off? Besides, even if their public responses are lacking, the reactions of entities like Facebook and Wells Fargo are still better than that of, say, lawmakers who regularly avoid their constituents or otherwise confront them in a less-than-conciliatory manner.

Speaking of Florida and gun violence, Sen. Marco Rubio, who has received upwards of $3 million from the NRA and has been a notorious no-show at scheduled town halls before his constituents dating back to last year, received the “Three Billboards” treatment from activist group Avaaz after his insistence that stronger gun laws would not have presented the Parkland school shooting, with the message “SLAUGHTERED IN SCHOOL/AND STILL NO GUN CONTROL/HOW COME, MARCO RUBIO?”

As with the movie Three Billboards Outside Ebbing, Missouri, these billboards are a reaction to an act of brutality involving a child (in Florida’s case, more than one child) and the subsequent perceived indifference or faulty prioritizing from those figures sworn to protecting and serving the most vulnerable people under their jurisdiction. Even if you don’t agree with Avaaz’s methods, the allusion seems all too appropriate.

In short, yes, lack of accountability and transparency in public companies and governmental organizations is not a novel concept. Following a near-catastrophic financial crisis brought on by reckless behavior by the very people who were supposed to help safeguard against this eventuality, however, and in an era in which Americans, fed up with politics as usual, are rejecting “traditional” norms alongside a president who flouts accountability and transparency as a raison d’être, bad behavior yet matters.

Banks that fund pipelines like the Dakota Access Pipeline at the expense of the environment and Native American land now increasingly run the risk of seeing customers take their money elsewhere. Social media companies that fail to protect their users and their users’ information risk people abandoning their service. Politicians who ignore their constituents invite primary challenges from activism-minded candidates. As prominent as some of these icons of their respective fields are, this is not to say they can’t experience palpable losses.

Mark Harmon’s character Leroy Jethro Gibbs on the show NCIS memorably is quoted as saying, “Never say you’re sorry. It’s a sign of weakness.” Not only does Gibbs break this rule at several points during the series, though, but his numerous failed marriages suggest a pattern of toxic masculinity to which the viewer should not necessarily ascribe. For organizations like Wells Fargo and Facebook, and even down to more regional entities like Broward County Public Schools, the non-apology apology as a means of saving face rings hollow. Do you want to earn back our trust or preach togetherness? Ditch the commercials and interviews, say you’re sorry, and do what you claim you’re going to do. At the end of the day, it’s not a hard concept.

U.S. Workers Are Making More Money, but There’s a Catch

graveyard_shift — “Yeah, Brad, the pay is great, but I haven’t seen my wife and kids in seven years!” (Image retrieved from quickmeme.com.)

Most Americans are making more money than they did 25 or 30 years ago. They are working more hours, too. On the face of things or in a vacuum, these trends might seem like fortuitous circumstances for the workers of the U-S-of-A. When we sift through why these phenomena are occurring, and how they may be related, meanwhile, our glasses may not appear quite as rose-colored regarding the employment picture in this country.

A recent report by Jacob Passy for MarketWatch sheds some light on why higher wages and longer hours might not be all they’re cracked up to be. As Passy explains, citing data from the Economic Policy Institute’s Bureau of Labor Statistics, average annual earnings for people in their “prime working years”—age 25 to 54—have increased by some 30% from 1979 to 2016, even after inflation. The bad news? This is often not mediated by an increase in wages/salary, but because people are working more to meet increased costs of living. To make things worse, and as you might expect, the extent to which people need to work to offset their expenses increases as their earnings level goes down. While all income groups saw an increase in hours worked in 2016 relative to 1979—on average, 7.8%—American workers in the bottom fifth of earners saw an increase of 24.3% over the same span, easily dwarfing the rates of increase for top earners (3.6%) as well as representatives of the middle class (9.4%). This is particularly problematic because there are limits inherent in any employment situation. For starters, there are only so many hours in a day, not to mention so many hours that establishments are liable to be open for business. Couple this with the notion that most workers do not make their schedules—rather, hours tend to be set by supervisors—and that availability of shifts might be further constrained by corporate strategy and concerns about profitability, and you’ve got quite the situation on the hands of American workers.

Not depressing enough yet? Wait—there’s more. As Passy reports, and as EPI researchers also found looking at data from the same span, more men in their prime working years are “disconnected from work.” Translation: they’re unemployed and not looking for work. From 1979 to 2016, the rate of men in their prime disconnected from work rose from 6.3% to 11.9%; women saw a decrease over that span from 29.8% to 24.1%. Once more, the picture is bleaker for certain populations, namely people of color, and specifically, black men. According to the EPI statistics, black males are twice as likely as white and Hispanic men to not be working, and when they are working, they work fewer hours, on average. Imaginably, employment rates are worse for those without a college degree, let alone high school diploma or GED equivalent.

This all comes to a head when talking about financial situations of workers across ethnicities, as Passy goes on to explain. Citing additional research by the Pew Research Center, he writes that, on average, white families possess just over $120,000 more of wealth than families of color. In addition, concerning the disparity in earnings, African-American and Latino households are more likely to be financially “underwater,” and children from poorer households—which does not necessarily mean those from minority populations but frequently does—are found to be less likely to achieve educational milestones that lend themselves to career success and increased wages. Talk about your vicious circles.

Skeptics of this information or others who would dismiss the trends about blacks and Hispanics/Latinos might point to stereotypical notions of them being deficient in moral fiber, lazy, and/or unintelligent. This is, of course, racist and unmitigated bullshit, but it’s an explanation that suffices for many, and even if I were to question it with logic and statistics, they would be loath to believe it, so let’s just leave that line of thinking aside and try not to slam our heads against hard objects out of frustration. On the work side of things, however, that people are working more irrespective of class or ethnicity is more difficult to explain than by simply denigrating minorities or the poor for their perceived lack of effort. Though I’m sure that won’t stop some people from trying. After all, people are working more. They’re being more productive. Gosh darn it, they’re illustrating the American spirit with their can-do attitude. U-S-A! U-S-A!

Maybe. But this also might be a space to consider how this feeds into concerns about the work-life balance in this country relative to other developed nations. Kerry Close, in a 2017 article which appeared in TIME Magazine, explored in a case study of sorts how France differs from the United States on its approach to work schedules and work-life balance. In terms of the raw numbers, yes, Americans do work more than their French counterparts, working an average of 1,790 hours per year to France’s 1,482, as measured by the Organisation for Economic Co-operation and Development (OECD). American workers are also more productive in terms of raw output and income per capita.

As Close tells, though, this was not always the case, and up until as recently as the 1970s, French workers actually put in more hours than we did. What led to this shift? While it may be no surprise to advocates of organized labor, the efforts of unions and collective-bargaining agreements were essential to this movement. Citing the research of Dartmouth economics professor Bruce Sacerdote, Close explains that in response to rising unemployment in the 70s, French unions advocated a “work sharing” policy that would decrease the number of hours logged by individual workers in favor of more people being afforded the ability to work. These policies, owing to their appeal, helped unions grow stronger and represent more workers, leading to the securing of valuable time off, which persisted even after the employment situation in France improved. As Sacerdote notes, today, France has 25 federally-mandated vacation days, allowing most employees to be off at the same time.

25 days off? That’s preposterous, you may be saying! How do those snail-eating Frenchies get anything done? As with isolated statistics about more hours worked and more money made by American workers having the power to mislead, that the U.S. exhibits a higher raw output and income per capita than France belies the benefits that the latter country experiences by offering more vacation time and other perks. Firstly, concerning those mandated days off, having most employees off concurrently means productivity doesn’t suffer in the same way as it does when people stagger their vacations in the United States, such as with the informal “break” that occurs between Christmas and New Year’s. As for the higher output per capita, again, this is a question of productivity. Giving people a more liberal amount of time away from work and permitting them to fully disconnect from the office—yes, even from work E-mails—tends to make them more productive when they are in the office. Thus, as Close indicates, it is not so much that European culture is by nature inclined to a more relaxed workplace, but that systems like that of France’s evolved out of a response to specific economic circumstances and out of genuine concern for the standard of living of a wide swath of the nation’s workers. In other words, while it’s a good thing that Americans work as hard as they do, in this instance, there certainly would seem to be such a thing as too much of a good thing.

At the heart of this discussion about benefits and stagnant wages is the role that unions play in negotiating for fairer wages, increased benefits, and safer working conditions, among other things. In saying this, I acknowledge public opinion on unions in the United States tends to be mixed; though Gallup polling on approval of labor unions has more recently seen an uptick in favorable responses, not long ago, in the wake of the Great Recession, approval had plummeted to a sub-50% level. Christ, my own father once uttered the phrase, “Unions are what’s ruining this country,” and when he found out Bernie Sanders was a backer of organized labor, he quickly dismissed any idea of supporting him. Just stab me in the heart, why don’t you, Pops?

Perhaps more significant within the same research were divides in responses based on party affiliation, as well as the consensus outlook on the future of unions. On the subject of Democrat-vs.-Republican splits, while favorability of unions has risen even among GOP supporters, Democrats (81%) are about twice as likely as Republicans (42%) to approve of unions, with independents squarely in the middle (61%). Meanwhile, on the subject of union influence and strength, while more respondents expressed the desire to see unions have more influence than they did when Barack Obama was in office, more than 70% of those surveyed expect unions to become weaker or stay the same. This isn’t particularly inspiring noting labor union participation as a subset of all American workers has steadily been on the decline over the past 40 to 50 years, and even less so when you consider the middle class’s share of the nation’s income has been on a similar decline over the same span.

This is before we even get to the case now before the Supreme Court in Janus v. AFSCME, which once against pits unions against the wealthy and conservative leaders of industry, not to mention the Republican heads of state and lawmakers who actively aid and abet the weakening of unions. The case, which specifically involves whether or not public-sector employees should be mandated to pay union fees even if they are not members and how this relates to First Amendment rights, is another iteration in the larger battle over what is termed “fair-share” representation by labor advocates. Opponents of these fees such as Illinois governor Bruce Rauner (Mark Janus, plaintiff in the case, is a resident of Illinois) and other GOP figures who preside over statehouses have been instrumental in advancing “right-to-work” legislation which limits the extent to which unions can collect dues from non-members or compel employees to join unions.

Roberta Lynch, executive director of the American Federation of State, County, and Municipal Employees Council 31, and others of a like mind, counter that fair-share fees are warranted because union leaders advocate on behalf of members and non-members alike. The case is expected to be decided along ideological lines, which could prove disastrous for public-sector unions, assuming Neil Gorsuch joins other conservatives in voting to undercut their power. Plus, by invoking the First Amendment, the precedent set by this ruling could pave the way for any number of legal challenges to other dues of a similar nature outside the realm of labor law. Or it could strengthen union resolve and end up blowing up in the faces of the conservative donors backing Janus (yup, where there’s anti-union smoke, there’s likely to be a Koch Brothers fire a-burnin’). Needless to say, the results could be very messy indeed.

Regardless of your opinion on unions, that wages have stayed mostly flat while the cost of living has gone up, and that people are making more money and working more hours, are two trends which aren’t up for debate. That there is a presumably causal relationship between these observed effects makes this all the more, as Jacob Passy puts it, “depressing.” If earnings are being used to offset expenses and people have to work more and more to make ends meet, this limits a family’s ability to save and prepare for the future, let alone spend time together. For all the talk of “making America great again,” the American dream, for many, is seeming like a pipe dream more than ever.

Do We Care about the National Debt?

debt_as_a_doornail — Yup, that’s a lot of debt. (Photo Credit: Justin Sullivan/Getty Images)

Alongside the immigration issue, the topic of the GOP tax overhaul is likely to be a prevailing theme leading up to the 2018 midterm elections in November. Republican candidates will be looking to tout its successes, and possibly the Trump White House’s political and economic agenda. Democrats will be looking to hammer their Republican counterparts over the idea the tax cut is intended to primarily benefit the wealthiest of the wealthiest Americans, not to mention corporations, which—and this seemingly can’t be stressed enough—are not people. In both cases, talk about our skyrocketing national debt will apparently be sparing as far as the national consciousness is concerned.

Before we get too ahead of ourselves, let’s talk about the more immediate tangible benefits that American families might experience, and in doing so, not be as dismissive as some Democratic leaders might be. Numerous companies have cited the GOP tax cut as the impetus for bonuses allotted for their employees, and one-time giveaways aside, many workers may have noticed appreciable increases in their take-home pay related to the tax law changes. Even when accounting for context, however, the public comments made by key Democrats don’t seem to assuage the contention coming from conservative circles that the Democratic Party is out of touch with the rank-and-file of the country. Nancy Pelosi, in particular, has been assailed for likening the $1,000 bonuses some people have received to “crumbs” relative to the gains wealthy individuals and large businesses will expect to receive as a result of this policy shift. My girl Debbie Wasserman Schultz (sarcasm intended) also caught flak for her comments as the same event that she wasn’t sure $1,000 goes far for almost anyone. Maybe, ahem, not to the likes of the Democratic National Committee, Rep. Wasserman Schultz, but $1,000 isn’t exactly chump change.

So, yeah, the positive aspects of the tax cut are not something to merely brush aside with a wave of the hand. Like crumbs. Or “deplorables,” recalling Hillary Clinton’s epic-fail gaffe. That said, if and how these bonuses apply for the average worker in the short term, and some real global economic concerns over the long term, serve to place the boasts of Donald Trump and Republican Party congressional leadership in a bit of a different light. According to a report by David Goldman and Jeanne Sahadi for CNN and citing a recent survey by Morgan Stanley analysts, only 13% of businesses’ tax cuts will go to bonuses, employee benefits, and pay raises, while 43% of the cuts will go to investors in the form of dividends and stock buybacks, which undoubtedly will involve some executives who are compensated in terms of stock incentives. That’s not nothing, but it’s also not to say that the American worker is a priority in this respect. The CNN report also cites statistics indicating that while companies have announced tax-cut-related bonuses and raises affecting some 3.5 million U.S. workers, that’s less than 3% of the 125.5 million U.S. workers in the employ of a company. Again, not nothing, but it imaginably might seem more like winning the lottery to those who don’t receive such rewards. And God forbid if you are underemployed, unemployed, or “work in the home” and don’t receive a traditional wage.

The obvious rebuttal to this criticism is that the tax cut was just recently put into effect, so it will take time for the economy to grow in proportion to its benefits, and for businesses to hire more and invest within the United States. Based on the way the law was written, however, there are plenty of red flags to be had. The Tax Cuts and Jobs Act of 2017 paves the way for permanent tax cuts for corporations, but on the individual taxation side of things, the modified rates are set to sunset by 2026. This means an extension of the Act’s provisions will need to be ratified by then, and seeing as Congress can’t seem to agree on anything these days except throwing ungodly sums of money at the military, this seems all but certain. In other words, the benefits of the tax cut—if they are to be enjoyed by as many members of the general public as the White House avers they will—are temporary, much like the one-time bonuses that companies are awarding to their employees.

And then there is the matter of our ever-escalating national debt. Annie Lowrey, writing for The Atlantic, probes the intersection of U.S. deficit spending with the GOP tax cut in relation to conservative Republican ideologies. In the onset, Lowrey speaks to the seeming strangeness of Donald Trump to make America’s debt a glaring omission from his State of the Union speech. She writes:

ISIS, tax cuts, public trust. Race, immigration, the Empire State Building. Civil-service reform, North Korea, manufacturing. President Donald Trump’s State of the Union speech addressed a broad sweep of issues. But one central economic topic went notably missing: the country’s growing annual deficits and its increasing burden of debt. The omission was a sign of the remarkable volte-face the Republican Party has taken on the country’s fiscal situation in just a few years. Republicans spent the early years of the recovery obsessed with the national debt, castigating Democrats for their supposed irresponsibility, warning about the dangers of the almighty bond market, and helping to construct complicated mechanisms to slash federal outlays. They are now spending what might very well be the late years of the recovery ignoring it, having passed a tax plan that will add more to the debt than President Obama’s stimulus package did and having forgotten their once-urgent plans to make cuts to Social Security and Medicare.

While this trend may prompt deficit hawks like Rand Paul to sob gently to themselves, Lowrey seeks not to be abjectly critical of Republicans in this regard, but rather to underscore just how much of a 180 this position is from the Tea Party fever which ushered so many Republicans into office and paved the way for a decade of legislative defeats for the Democratic Party. While Trump is not your average Republican and all politicians are liable to break their campaign promises—Trump, despite not being a lifelong politician, is a salesman and pathological liar, so somehow even more liable to do so—even he ran on a campaign of reducing our annual deficits and balancing the budget. If there is criticism to be leveled on Lowrey’s part, it is more so on the side of the Republicans’ past obsession with spending that sent the federal government into shutdown mode at least once and gave GOP members of Congress ample opportunity to rail against the Obama administration’s supposed largesse.

Now with Donald Trump as President and Commander-in-Chief on top of Republican control of both the House of Representatives and the Senate, the shoe is on the other foot, and with the change has come the aforementioned commensurate reversal on the topic of deficit spending. While a minority of American workers are presently receiving one-time gains or improvements to the benefits they receive from their employers, as a result of the Tax Cuts and Jobs Act, according to figures from the Congressional Budget Office and the Joint Committee on Taxation cited by Annie Lowrey in the article, the tax cut would add $1.8 trillion to the national debt over the 2018 to 2027 span. Not million. Not billion. Trillion. While the magnitude of the addition to the debt might be vaguely surprising, though, the mechanism should not. By effecting a tax cut, it’s a direct drain on revenue paid directly to the government. At the same time, meanwhile, Republicans have more recently shied away from the entitlement reform and domestic program cuts that have previously been a rallying cry for the party, and have further turned the dial up on this trend with calls for more military spending. Mentions of deficits and debt during congressional proceedings, too, have largely decreased since peaking in 2011, and the Trump administration, ever the depiction of tumult, is even more loath to broach the subject, and when it does, as Lowrey notes, its officials do so “with little sense of outrage or concern.”

Is this attitudinal change with respect to the national debt indicative of a seemingly inherent hypocrisy in major-party politics—i.e. when we’re in office/the majority, the same rules need not apply—or simply reflective of a sea change regarding how all of us have come to regard deficit spending? To be honest, it’s probably a little from Column A and a little from Column B. As one Obama-era economic adviser quoted in Lowrey’s piece believes, Republicans’ prior importance placed upon the debt was merely a tactic to garner short-term political capital. To boot, retrospective thinking from experts on the trouble the United States might face in relation to its debt suggests worries based on European credit crises like the one notably faced by Greece may have been overstated, not to mention concerns about how deeply the American public is invested in this topic.

On the latter count, and citing a study by the Pew Research Center, Lowrey notes that whereas 72% of respondents named reducing federal deficits a top priority in 2013, today, fewer than half of those surveyed do. That the U.S. economy is performing well overall at the moment is an important factor herein, but also playing a role is growing attention other political and social issues, namely drug addiction/the opioid crisis, the environment, and improving the nation’s infrastructure and transportation. From our perspective, then, it may not be a case so much of not caring about economic issues like the national debt as much having a lot on our plates. Besides a majority of Americans still viewing the economy as a pivotal priority, fears about terrorism and preoccupations of the state of education in the United States weigh heavily on people’s minds.

Again, though, this isn’t solely a knock on Republicans. If Democrats were in power, there is every indication they’d be running up the country’s debt and not expressing outward reservations about doing so. This is not to say that all deficit spending is inherently bad; investments made which can lead to future growth or prevent future calamity come with a cost. That said, as with personal debt—a subject with which a seemingly increasing number of Americans have become familiar—the national debt is a “drag on the economy,” as a representative of the Committee for a Responsible Federal Budget, quoted in Lowrey’s piece, highlights. Meanwhile, even if GOP leaders have temporarily put aside talk of dismantling core components of the U.S. social safety net, this is not to say that these programs do not need improving. With next year’s annual budget deficit set to top $1 trillion and concern for the sustainability of this arrangement seemingly on the decline, if what Annie Lowrey and other observers say is true, things are likely to get worse before they get better on the debt front. Just how bad, and whether or not a bursting of this bubble might produce a credit catastrophe, unfortunately remains to be seen.

Now that the Tax Cuts and Jobs Act has been signed into law and we have ample time to actually stop and think and wax philosophical about it, the Republican Party’s strategy is not altogether unsound from the perspective of manipulating public opinion. By the time the individual provisions of the tax cut are to sunset, we’ll be at least two more presidential election cycles down the road. Thus, the GOP can likely reap the rewards of the short-term political gains they’ve helped foster presently, and by the time Donald Trump is out of office (hopefully long before 2024, but these days, given the political atmosphere, I don’t like to get my hopes up) and Democrats have gained a majority in one or more wings of Congress or control the White House, they can defray any ill will they might have incurred related to the tax cut by pointing to the disastrous economic and social policies of the liberal left. In a 24-hour news cycle where viewers are already primed to quickly forget what just happened, it’s a fair bet that many of us will forget who the architects of this concession to corporate executives and wealthy benefactors even were.

This, to those of us insistent on documenting this chapter in American history, is rather obviously a long con. And I do mean con. In effect, it’s part of an even longer-term confidence trick that conservatives and neo-liberals have been imposing on the American public. Though officially titled the Tax Cuts and Jobs Act of 2017, the GOP tax cut is dyed-in-the-wool trickle-down economic theory. The primary beneficiaries of its amendments to tax law are corporations and business owners, under the idea that fewer taxes paid means more money to be invested in creating jobs and improving conditions for workers. The reality is that numerous corporations, financial experts and firms making use of the carried interest loophole, and pass-through entities have been taking advantage of favorable aspects of the tax code for years, and that the insistence from critics on the right that regulation and taxation is killing American industry tends to be overstated. There are a number of complex factors that go into why businesses succeed or fail, including changing social norms and advances in computer/automated technology, but consumer demand and discretionary spending are a crucial part of this mix. As for the employment side of the equation specifically, if firms are offering bonuses and other incentives to their workers, it is most likely not a sign of their generosity, but rather a competitive strategic move. In a tight job market, when companies like Walmart are raising wages, it’s an indication they’re doing so because they feel they have to survive.

Moreover, with the lowering of the top individual tax rate and the permanent slashing of the top corporate rate, the Tax Cuts and Jobs Act, given its signaled priorities, is very clearly class warfare. The GOP tax cut, ostensibly a boon for the middle class, working class, retired Americans, and the poor, is visibly skewed toward the most profitable companies and wealthiest individuals, and with caps on deductions for state and local taxes and property taxes, as well as the elimination of the personal exemption, the emphasis is not only on limiting the ability of the rank-and-file to alleviate their tax burdens, but to punish states like California, Connecticut, New Jersey, and New York—states that all went blue in the 2016 election, it should be noted—that feature higher-than-average tax rates and were more liable to take advantage of superior SALT deduction policies. As alluded to before, too, Republicans’ success in passing tax “reform” legislation greases the wheels of attempts at entitlement “reform.” Which essentially means cuts to programs like Social Security, Medicare, and Medicaid, because all that lost tax revenue is going to have to be made up somewhere else, and in all probability, it will not be coming from the untold sums stashed by the wealthy in offshore banking accounts and other tax havens.

The national debt is a real concern. However, it’s not a politically sexy topic right now, and with the stock market seeing record highs (when it’s not seeing dips related to fears about rising interest rates), it is seemingly of less interest to many of us as well. As yearly deficits continue to mount, and as questions of sustainability persist, it begs the question: how much longer can we continue to ignore that $20+ trillion elephant in the room?

Disney Owns a Ton of Shit, and Yes, We Should Be Concerned

thats_not_a_moon — If *Star Wars* is the analogy for Disney as a company, especially in the wake of its prospective acquisition of most of 20th Century Fox’s assets, it’s decidedly more Galactic Empire than Rebel Alliance. (Image Credit: Milli-Jane)

The Walt Disney Company was already a big deal prior to the events of the past week, but with Disney’s acquisition of most of the assets of 20th Century Fox, the corporation just became that much more monolithic. The lineup Disney now boasts in terms of the entertainment to which it has the rights is truly breathtaking, not to mention difficult to recall and enumerate. Concordant with this notion, let’s bring in Derek Thompson, editor for The Atlantic, to set the scene:

The yuletide haul includes some of the most famous properties in television and film. In the transfer of power, Disney would receive the 20th Century Fox film studio, including the independent film maestros at Fox Searchlight (Best Picture Oscar-winners include: Slumdog Millionaire, 12 Years a Slave, and Birdman), the X-Men franchise, Fox’s television production company (worldwide hits include: The Simpsons, Modern Family, and Homeland), the FX and National Geographic cable channels, and regional sports networks, including the YES Network that broadcasts New York Yankees games. Disney also acquires a majority stake in the TV product Hulu, which it may use to kickstart its entry into the streaming wars.

These additions would enrich an overflowing treasury at Disney, whose assets includes Star Wars, Marvel, Pixar, ABC, ESPN, the world’s most popular amusement parks, and, of course, its classic animated-film division. When Mufasa tells Simba in The Lion King that “everything the light touches is our kingdom,” it isn’t just memorable screenwriting. It is corporate guidance.

Movies. Television dramas. Sports and nature shows. And all that merchandise. When Thompson speaks of a “haul,” he ain’t just whistlin’ Dixie. So, what is the significance of this deal? To be fair, it depends on who you ask and about which aspect you are most concerned. First, let’s view this deal alongside other recent bids for corporate consolidation, for no mega-merger is made in a vacuum, of course. Just recently, CVS Health and Aetna, Inc. agreed to a $69 billion acquisition agreement, the prospects of which are concerning to any number of outside observers, including those worried about what the merger might mean for consumers. Then there is the proposed deal between AT&T and Time Warner, which has been challenged in court by the Justice Department. You know, not for any political reasons or anything—it’s not like President Donald Trump has had a feud with CNN that may be motivating this anti-trust challenge. The Disney-Fox merger, if it were to pass, would be the largest ever among entertainment companies. As Thompson explains, in terms of percentages, Disney would control as much as 40% of the American movie business and 40% of the U.S. television business, and potentially yet more of the sports TV landscape between ESPN and regional sports networks. As far as the rich getting richer goes, Walt Disney Co. would be like a giant cartoon octopus with its suckered arms grasping onto all sorts of revenue streams.

Derek Thompson, for his part, has a different analogy, but one that likewise reflects a sense of dread. In fact, the same article from which I’ve been pulling data and quotes alludes to it in its very title: “Everyone Should Be Very Afraid of the Disney Death Star.” As any Star Wars fan, nominal geek, or individual who has seen the first film can at least partially describe, the Death Star is a massive spherical mobile battle station armed with a super-laser capable of destroying an entire planet. Suffice to it say, then, that the DS-1 Orbital Battle Station, as it is officially designated, is indeed something to be feared. Beyond perhaps the obvious that Disney’s relative dominance in the American corporate universe makes the Death Star analogy particularly apt in light of its awe-inducing size, though, what specifically should have us shaking like the proverbial leaf?

In answering this all-important question, it makes sense to step back a bit and consider the motivations of each party in this acquisition deal. For Disney, Thompson explains, it’s about streaming content. Since 2010, in the United States, only one age group has seen an increase in watching “traditional” television: the 65+ crowd. In light of this, the future is clearly with streaming services like Netflix and other cord-cutting avenues, and for Disney to compete, it has to become big enough to have enough rights to enough content that it can hope to compare. Companies like 21st Century Fox and Time Warner, meanwhile, the prospective sellers in these purchases, see the writing on the wall when it comes to their dwindling TV ratings and unimpressive box office numbers. Rather than holding on and bracing for the inevitable job cuts to be announced and made, they’re cashing out. In the particular case of Rupert Murdoch and Fox, it will retain some assets even after Disney’s acquisition, namely FOX Broadcasting, FOX News, and various national sports networks. After all, without FOX News, where would all the angry old people go to get their politics? Shit—what would Pres. Trump do for hours a day?

OK, now that we’ve gotten an idea of Disney’s strategy in all of this, let’s get to the implications of the move, and why people like Derek Thompson are particularly troubled by it. For Thompson, simply put, dealing with a Death Star-sized titan in the entertainment industry is going to be a nightmare for consumers, Hollywood studios, and tech companies alike. He elaborates:

If [this] sounds a little scary for television distributors, or television viewers, then good. Everybody should fear the Disney Death Star. Hollywood studios should be afraid to compete with a corporate goliath that could earn half of all domestic box office revenue in a good year. Every tech company y should be afraid to get into a content war with a company that combines the top blockbuster movie studio, with a top prestige film company, with a world-class television production company, with the most valuable franchises—Star Wars, Marvel, Pixar, and X-Men—in the world. And consumers should fear too; not just those who are afraid that Disney will water down artsy filmmaking (like Fox Searchlight’s Grand Budapest Hotel) and R-rated superhero films (like X-Men’s Deadpool), but also those who are afraid that too much control of any industry confers monopoly power that restricts choices, raises prices, and hurts workers.

In other words, with an effective monopoly on media content, or at least as part of an oligopoly among the other “goliaths” of the movie and television world, Disney would be able to throw its weight around, and the rest of us would likely have to pay a premium or risk missing out on what it has to offer. Viewing these sentiments alongside the recent FCC vote to repeal net neutrality, the public has every right to be worried access to content in the near future will come with a very high price attached.

For those reading who possess pre-existing knowledge of the Death Star, you may have initially taken issue with the notion that this monstrosity is something to be feared. With respect to its destructive capabilities, it has to be honored that the Death Star can blow shit up. This seems beyond question. In practice, if you will, however, the Galactic Empire’s spheroidal moon-sized battle station of choice doesn’t have a great track record. In the first film—and don’t get me started about which is Episode I or Episode IV; I mean the one that came out in 1977—the Death Star is taken out with a strategically placed shot by Luke Skywalker that travels down an exhaust vent and goes all the way down to the reactor core. Sure, Luke needs the Force to be able to guide his torpedoes down the shaft that sets off the critical blast, but in terms of a colossus like that being able to be brought down by the weaponry of one adversarial craft, such is a design flaw that seems particularly glaring, even for the likes of a brutal galactic regime that, as a function of being evil, is contractually obligated to underestimate the oppostion. In Return of the Jedi, a second Death Star is in the midst of construction, but doesn’t even make it to completion. The Death Star II—let’s call it—is apparently designed with a major weapons upgrade, but alas, the Rebels put the kibosh on it. Another reactor core explosion, another dead Death Star.

If these dadgum Death Stars are so easy to explode, why is Derek Thompson warning of potential danger? Well, Thompson is fully aware of the Death Star’s legacy of destructability, and based on this, he’s alarmed for Disney’s sake, too. From the article:

[H]ere’s the truly weird part: Disney should also be afraid of its own Death Star. (After all, the thing keeps getting blown up.) In the last fiscal year ending in October, Disney’s made $55 billion in revenue, with about 60 percent coming from television and film (the rest came from parks, resorts, and merchandise). That 60 percent is endangered: Box office ticket sales have been flat or declining for years, and television is in obvious structural decline. In many ways, the entire company’s future hinges on its ability to funnel its expansive universe of entertainment into a single direct-to-consumer stream that takes on Netflix, which already has more than 100 million subscribers worldwide.

To put this another way, Disney is taking a gamble that it will be able to compete with Netflix, and with the company already so reliant on revenues from an industry on the decline, not to mention already behind the curve with respect to Netflix’s legion of subscribers, it’s not an insignificant risk. So, on one side, if Disney as the Evil Empire is successful in its bid to rival or even surpass the top dogs in the streaming world, Imperial forces will be that much better able to impose their will on the consumer and content producers alike. On the other hand, if Disney fails to upend its prospective competitors, this can mean canceled projects/divisions, lost jobs, and other negative outcomes. Who or what do we root for in this situation? A draw? For the Galactic Empire and the Rebel Alliance to work out their differences, and maybe hug it out as an affirmation of their newfound bond? How likely does that seem?

Much about this deal is up in the air as far as we plebeians know, including whether or not the acquisition will make it past would-be government regulators in the first place. Reportedly, Amy Klobuchar and other congressional Democrats are requesting hearings about the Disney-Fox deal because of their concern about what this agreement might mean for consumers. Almost assuredly, there will be jobs lost as part of the takeover. Regarding the FOX Broadcast Network, there are presumptions that it will begin to be yet more sports- and news-oriented, potentially putting the future of original shows like Empire and Family Guy at risk. In the milieu of the silver screen, the acquisition of Blue Sky Studios will give Disney and Universal Studios a major leg up on any future competitors with respect to animated feature films. In the streaming world—the very crux of this deal—Disney will now own a majority stake in Hulu, but whether this service is to be improved or merely designed as a complement to a forthcoming new behemoth stream service of Disney’s design is likewise not clear. Amid all the excitement about the Marvel brand and the X-Men franchise being on the same ticket, so to speak, there is every probability that a Disney-Fox merger would result in much upheaval, and those concerned with antitrust matters are right to be wary of having so much power in the hands of one company.

With size and power, there is also the worry that Disney will use its newfound leverage to try to be a bully to the press. It’s not like there isn’t past precedent for this either. Disney banned Los Angeles Times critics from advanced screenings of Thor: Ragnarok because of the paper’s investigations into whether or not the Walt Disney Company is paying its fair share for the benefits it reaps based on its relationship with the city of Anaheim. Disney eventually reversed the ban, but not before a significant amount of media scrutiny and public outcry. This is a similar tone adopted by the Trump administration, one that views a free press as the enemy and seeks to silence or otherwise delegitimize the news media that dares to turn a critical lens on any of its misdeeds. Speaking of Trump, he happens to be a good friend of Rupert Murdoch’s, and as we know, is an avid watcher of FOX News. That the Justice Department swooped in to legally challenge the AT&T-Time Warner deal and has seemingly not met the proposed Disney-Fox merger with the same antitrust zeal is definitely bad optics, and very well may belie a streak of favoritism that already plagues the current administration.

Josh Spiegel, co-host of a Disney movie podcast and writing for /Film, shares the sense of pessimism Derek Thompson and others feel surrounding this deal, and as a Disney fan, his troubled outlook is as spiritually-minded as anything else. Using the setting of Pixar’s WALL-E as an all-too-appropriate metaphor, he writes:

A couple years after Disney bought Pixar, the animation studio released one of its best films, WALL-E. That film doesn’t spend a ton of time on describing how the remaining vestiges of the human race became so fat that they couldn’t walk around on their own two feet. We just see plenty of happy, wildly unhealthy humans rolling around on floating recliners on an outer-space cruise ship as they enjoy the spoils of what appears to be the only corporation left in humanity: Buy-n-Large. The few shots we see of abandoned BNL stores call to mind the Super Targets or Wal-Marts that appear in various metropolitan markets around the country. But BNL’s influence extends beyond the superstores of the 21st century; the last footage we see of a live-action president (played by Fred Willard) suggests that he was part of the BNL corporation as well as being a politician. By the time that WALL-E finds himself on the cruise ship Axiom, there’s no separation between BNL (referred to in a nursery overseen by robots as “your very best friend”) and any of the services offered on the ship or even the clothes the humans wear.

Disney is not at the level of BNL…yet. One of the side stories of Disney buying Fox is that its current CEO Robert Iger will extend his term at the top of the company through 2021, meaning that those pervasive rumors earlier this year about him running for President in 2020 are now moot. But it’s hard not to see some parallels between the rise of Disney over the last decade-plus (there was once a time when they didn’t even own Pixar, let alone Lucasfilm, Marvel, or Fox) and a massive conglomerate like BNL. Disney does not have superstores like the BNLs of the real world, but its products are everywhere to a point of maddening ubiquity. It’s not like Disney buying Fox would be the first time they’ve expanded their growth, but this time, it suggests something more disquieting and engulfing.

For all its cute cartoon characters and heart-warming tales, the Walt Disney Co. itself is not the underdog we traditionally like to root for in the stories it sells. It is a Goliath intent on churning out blockbusters and selling truckloads of toys, dolls, and other merchandise, and this promotes real trepidation among those who enjoy products outside the Disney vanguard. As noted, it’s troubling to fans of various programs aired on Fox, in that Fox might be envisioning a strategic shift and Disney might not have any use for them, imperiling their future. From a cinematic perspective, 20th Century Fox and Fox Searchlight have produced material that is geared toward adults and has garnered its fair share of critical praise and recognition from the Academy, but there exists the fear herein as well that their releases will become watered down, or otherwise will fail to be prioritized in Disney’s money-making enterprise. Meanwhile, in the streaming wars, who knows what a Disney-vs.-Netflix battle might look like? There is every reason to worry the relative dominance heretofore of Hulu and Netflix in the streaming market will allow them to put the squeeze on we consumers. Perhaps the existence of competing services like DirecTV Now, Sling TV, and Sony PlayStation Vue as well as the growing demand “among cord-cutters” will be strong enough to counteract such a trend. Perhaps not.

Assuming the acquisition will be allowed to pass, Disney will own even more shit than it already does. For consumers, content providers, Disney fans, and arguably the Walt Disney Company itself, this is something of which to be afraid. After all, empires fall, and even Death Stars have been known to explode from time to time.

Tales from the Cryptocurrency: On Bitcoin and Bubbles

bit_players — If Bitcoin makes your eyes widen like that, maybe I should start mining some for the excitement factor alone. (Image retrieved from bitcoin.org.)

If you’re just hearing about Bitcoin and the term cryptocurrency—congratulations!—you’re behind the curve and have likely long ago missed the chance to make dream profits from a small investment in this force in online currency. Oh, well. Good luck keeping your eye out for that next big opportunity, eh? Just this year, Bitcoin, in particular, has seen its price explode from just under $1,000 at the start of 2017 to current values above $10,000 and even $15,000 today, prompting regrets from any number of amateur investors. Then again, how many of these same rueful sorts would have had the knowledge of the currency markets needed to inspire such an investment, let alone the foresight that such a meteoric rise would or even could transpire? These are the same kind of regrets that those who did not, say, invest in IBM prior to the ascendancy of computer technology may have confronted. Bitcoin’s jump in the markets is just the latest example of an opportunity based on an up-and-coming technology, and perhaps related to the GOP’s passage of the House and Senate versions of a tax reform bill that await reconciliation, those with the means to invest have seen the writing on the wall are wildly enthusiastic about the prospects of the growth of the cryptocurrency market.

I am certainly no expert in matters such as these, so for both our benefits, what is Bitcoin, and what is cryptocurrency? Concerning the former, and according to the FAQ page on the Bitcoin official website:

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

For the purposes of this post, we’re going to bypass the whole triple-entry accounting concept and focus on the essence of what Bitcoin is—and for that matter, what it isn’t. Bitcoin is a payment system based on a decentralized network, eschewing a central authority or other means of traditional ownership. It is an online currency, but as a completely digital form of money, it therefore lacks physical substance. You can hand $20 to the cashier when you buy lunch. You can’t do the same with Bitcoin. In terms of how bitcoins are produced and acquired, when not receiving existing them as payment, purchasing them at a Bitcoin exchange, or trading locally for them, bitcoins serve as a reward for bitcoin “mining,” which involves the use of special software to solve complex mathematical problems and therefore accrue value in relation to verifying transactions on the blockchain, Bitcoin’s public ledger of past transactions. There are more mechanics to bitcoin mining which I admittedly don’t understand, but suffice it to say that these computations are meant to be difficult and time-consuming to perform, necessitating an investment of energy and the technical capability (in terms of computing power and electrical demand) to produce the worth the process is designed to create. This means the requisite software and hardware, or the cash for a bitcoin cloud mining contract. If this is intimidating to you, it’s downright terrifying to me, I assure you.

Bitcoin is a form of cryptocurrency. OK, so what’s cryptocurrency? Generally speaking, cryptocurrencies are denoted by their digital or virtual reality and the use of cryptography as a security measure. Think codes and ciphers, and anything that uses encryption to prevent unwanted access. Bitcoin, in light of its surging demand, is the most prominent example, but there are a number of effective competitors within this market. Litecoin, Ethereum, IOTA, and Ripple are among the other larger names in cryptocurrency trading.

With any technological advance, the fear of the unknown is bound to cause some concern. This much is understandable. Because of the unique structure of Bitcoin’s network and other cryptocurrencies, however, there are additional concerns that transcend mere lack of familiarity. As with anything, it bears mentioning with respect to Bitcoin that not all news reports and analyses of this currency are equally valid. By this token, not all worries surrounding cryptocurrencies are of the same merit. With all this in mind, let’s take a look at some of the risks associated with non-traditional digital currencies:

Volatility

Yeah, this is kind of a big one. Recall our earlier discussion about the rapid rise in the price of Bitcoin relative to the U.S. dollar. As even Bitcoin proponents will acknowledge, the total value of bitcoins in circulation is relatively small compared to what it could be. As such, small events can cause disproportionately large effects in terms of changes in price. If you believe these same proponents, as the currency matures, as acceptance of it grows, and as security measures are improved, the market for Bitcoin and other cryptocurrencies should stabilize. In the meantime—gee, wow!—it’s just going to be a wild ride until that point! OK, there is some inherent excitement in not knowing what will ultimately become of Bitcoin and how high it may go up. Touting Bitcoin’s thrill-ride unpredictability as a virtue, however, somewhat belies the trepidation that the average investor might feel, especially if his or her means are of the sort that any substantial losses might lead to severe financial consequences. Owing to the present lack of liquidity for Bitcoin and other cryptocurrencies, this characteristic is not to be dismissed, especially not in the short term.

Anonymity

Bitcoin has been said to be both anonymous and yet utterly transparent. How can this be so? All Bitcoin transactions are recorded on the blockchain, the aforementioned public record of the available supply of bitcoins. Accordingly, the receipt and sending of bitcoins is designed to leave a trail. How these transactions are denoted, meanwhile, is different from that of other methods of payment. While Bitcoin, for instance, ties transactions to a specific address, that address is not necessarily tied to a real-life identity, prompting some experts to refer to it as “pseudonymous” as opposed to purely anonymous. Even in the digital realm, traces are left for those that know how to find them. The big bugaboo about this relative anonymity is that it can and has been used in the service of illegal acts. Just enter an Internet search for “Silk Road marketplace” and you’ll begin to get a sense of why some observers are so concerned. Then again, cash is truly anonymous, and it is an essential part of our economy. Thus, to point to Bitcoin’s structure as nefarious and to say nothing of this arguable limitation of paper money is misleading. Cryptocurrencies aren’t more anonymous than cash, and furthermore, are designed to prevent financial crimes.

The Bitcoin Bubble

As explained on Bitcoin’s FAQ: “A fast rise in price does not constitute a bubble. An artificial over-valuation that will lead to a sudden downward correction constitutes a bubble.” The prevailing sentiment here seems to be that there are factors which contribute to the creation of a bubble, namely consumer confidence or lack thereof, a difference between price and value not based on the currency’s fundamentals, investor greed, and speculation fueled by press coverage. In other words, these are things that are beyond Bitcoin’s control—whaddya gonna do? Except that there is a lot of concern about the “Bitcoin bubble.” A lot of concern. In fact, a casual news search would almost seem to confirm a consensus as to the idea that Bitcoin is in the midst of a bubble and the “pop” is coming any moment. The ultimate question, in this case, is whether or not the burst of the bubble will mean disaster for the financial markets and the economy as a whole, and some analysts point to the notion that Bitcoin possesses small value and few present links with the rest of the economy. So, should we definitively be terrified of what happens with Bitcoin? Well, no. Should we be wary of what manifests with cryptocurrencies? I submit yes.

Regulation

The volatility and novelty surrounding cryptocurrencies like Bitcoin are reason enough for some investors and industry experts to approach them cautiously, but the lack of a central authority or governing body for these currencies is likewise worrisome for many. In the wake of the frenzy over online currencies, some countries, especially those like China and North Korea that are predisposed to scrutinizing consumer transactions, have taken steps toward possible restrictions of bitcoin sales. However, not all nations view firmly-controlled currency markets to be as virtuous as do the Chinese and Koreans, and this makes enforcing any rules or laws difficult without any widely-accepted standard. As alluded to earlier, the possibility that bitcoins traded on the Internet might be used in the service of illegal activities weighs on the minds of many observers, as does the concern cryptocurrencies might be used to finance terrorism. Again, it is not as if fiat money such as dollars and euros cannot be employed in the same way, so to isolate Bitcoin and say nothing of traditional methods of payment is a bit disingenuous. This notwithstanding, cryptocurrencies would probably benefit from some degree of oversight. An all-too-common reaction among conservative types to regulation is the sentiment that governments or other standard-makers necessarily stifle economic growth through their interventions, but too little involvement from state agencies, independent regulators, and law enforcement can be a detriment in their own right.

Security

In theory, the use of cryptography in Bitcoin’s workings is designed to make this technology more secure than traditional currencies, but vulnerabilities do exist. Proponents of Bitcoin chalk this up chiefly to user error. In other words, blame the bitcoin player, not the bitcoin game. The recent theft of an estimated $70 million worth of bitcoins from NiceHash, a bitcoin mining operation, however, definitely raises some eyebrows. Ethan Wolff-Mann, writing for Yahoo! Finance, explains that bad digital habits such as passwords that contain personal information or are not changed frequently enough may increase risks of using Bitcoin and other digital currencies, and two-factor authentication (2FA), already adopted only by a minority of average Internet users, may not even be sufficient for safeguarding the contents of one’s electronic wallet. As Wolff-Mann puts this, in short, most people are not ready for Bitcoin. Then again, the same investors who would dabble in cryptocurrencies might not fully comprehend other financial instruments more familiar to veterans of finance. Once more, the individual is advised to be careful when trading in digital currencies, while we all are encouraged to be mindful of the possibility that thefts and bursting bubbles could produce more dramatic ill effects than we might otherwise would believe.

Going back to the notion of whether the feverish demand for Bitcoin and other cryptocurrencies, and the associated price spikes, constitute a bubble, that there is a desire for digital currencies isn’t subject to debate. Whether or not this yen for Bitcoin et al. is simply a phase, or something that reflects a shift toward non-physical means of creating value, is more questionable. Many people who get paid money to render their opinions regard the Bitcoin craze as little more than a fad, or worse, a parlor trick designed to deceive gullible investors. Still others see the fervor for Bitcoin as indicative of the times in which we live, and another reason to blame—three guesses!—millennials for their buying and investing habits. Supposedly, the rise of bitcoin is indicative of their disinterest and mistrust of traditional financial institutions. Damn young people! Driving up the price of Bitcoin and eating avocados! Beyond the notion this viewpoint seems decidedly hard to prove, it’s a facile argument to make anyway. If Bitcoin is attracting younger investors, that’s the market’s problem, and this logic assumes these dumb yuppies don’t know what to do with their time and money. The customer is always right—except when you can look down upon his or her inferior knowledge or intellect.

Dismissing the enthusiasm and possibilities behind cryptocurrencies appears to be as fruitful as dismissing the viewpoints of younger voters because they did not vote more strategically to back Hillary Clinton. Once more, it is incumbent upon the solicitor to make his or her case for your support. Hillary, as experienced and as preferable to Donald Trump as she was for so many Americans, didn’t do that. Donald Trump, the consummate snake-oil salesman that he is, did. Regarding Bitcoin and its supposed dangers, rather than hoping to shame millennials into better choices or trying to appeal to their sense of risk aversion, perhaps a better tack would be to offer the advice that Bitcoin, like any investment vehicle, comes with certain risks, but if you understand this principle, and especially as an asset to hold for appreciation over the long term, it might be worth the concession, and certainly worth familiarizing oneself with from the standpoint of the financial adviser. Even proponents of Bitcoin would be quick to assert that this currency should not be seen as a means to get rich quick, but rather as a tool to facilitate online transactions and to diversify one’s pool of investments. Besides, and this evidently bears repeating, for all the concerns about security and volatility associated with cryptocurrencies, cash and other more traditional modes of exchange present their own challenges in these respects.

From what I can assess, Bitcoin and other cryptocurrencies are neither inherently good nor inherently bad. They may be useful for some investors and unwise for others, and a well-apportioned amount of regulatory oversight in how it is used, particularly in transactions across international lines, is of worthy consideration. Amid the ongoing craze, both consumers and analysts alike would do well not to overreact to the changes.

Category: Business