Thursday, August 23, 2007

Recalls highlight price of corporate cost cuts

From Reuters:

Recalls highlight price of corporate cost cuts
By Brad Dorfman and Justin GrantThu Aug 23, 1:50 PM ET
The recent health and safety scares that led to major toy and food recalls highlight the pressures facing companies that export their manufacturing, and just how quickly a corporate image can become tarnished.
Mattel Inc last week announced a recall of millions of Chinese-made toys due to hazards from small magnets and lead paint, its second major recall this month.
The actions followed news of pet deaths blamed on tainted wheat gluten and rice protein exported from China, and the recall of toothpaste made in China that contained a chemical used in antifreeze.
Quality and safety of production has become one of companies' and investors' chief concerns, especially in recent years when so much U.S. manufacturing has been jobbed out to third parties in countries with far less monitoring.
Mattel's recalls helped to push the U.S. Consumer Product Safety Commission into talks with the Chinese government over safety requirements before Chinese products come to market.
"There are manufacturing standards in the U.S. that have saved lives," said CPSC spokesman Scott Wolfson. "We want manufacturers to understand there's an expectation that those standards will be met."
Whether it's children's toys with easily swallowable magnets attached, bibs covered with lead paint or manufacturing facilities that pay slave wages, there is a seemingly endless list of things that can go wrong in a supply chain.
While much of the recent focus has been on apparently lax Chinese safety standards, U.S. companies are making a choice to have their products manufactured there, experts said.
Shareholders may be happy when costs go down, but regretful when major recalls hurt a company's brand.
"When you have a long supply chain, when you're aggressively pushing the suppliers to capture every penny of value, some unscrupulous suppliers are going to try to cut corners, said the CEO of toy seller FAO Schwarz, Edward Schmults, in an interview. "You can still get a lot of lead paints and lead items in China. It's not well policed."
A poorly supervised supply chain can cause problems in a hurry.
"Your product is damaged and your reputation is damaged, and ultimately your profitability is damaged," said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.
Consumers are price conscious, but they will balk at lower-cost goods when they become a safety risk.
"It wouldn't surprise me if (scrutiny of manufacturers) resulted in higher prices ... Consumers may have to pay a little bit more to ensure that their toys are safe, but I think that's a premium that most consumers don't really mind paying," said Bob Goldsborough of Ariel Capital Management, whose firm owns about 4 million Mattel shares.
Increased regulation, whether by government agencies or by the companies themselves, will drive manufacturing costs up.
"We complain about the government regulation, we complain about the high prices of products," said Pam Ellen, assistant marketing professor at the Robinson College of Business at Georgia State University.
"So we get more of these lower-priced products which solve our pocketbook interests, but then we find out the advantages we have with all of these regulatory agencies that run the prices up," she said.
While outsourcing to China or other low-cost countries may save money, at some point companies can find themselves in a position of having to say there is only so low prices can go, Northwestern University's Kellogg School of Management professor Kent Grayson said.
"I think these events in China, and how they have rippled through the United States, will encourage companies to consider other solutions or investigating fixing the current solution," Grayson said.
Those fixes can be expensive, according to experts.
"They can try to do a lot more inspection -- that's costly," said Marshall Meyer, a professor of management at the University of Pennsylvania's Wharton School of business.
Other options, either having more employees in other countries to monitor subcontractors, or investing in and taking control of some of the subcontractors, also will be costly, he said.
Mattel didn't respond to a request for comment.
Hasbro Inc, the world's No. 2 toy maker, said it doesn't seek the cheapest possible manufacturing available, and instead pursues contractors that meet certain criteria.
In the past, U.S. companies have had to take major steps to mitigate consumer concerns about overseas manufacturers.
Nike Inc was forced into the spotlight in the mid-1990s when it was revealed that its goods were being assembled in Asian sweat shops by underpaid, underage workers who were exposed to harassment and toxic chemicals.
The athletic shoe maker, which maintained that it was unfairly singled out, responded by cutting ties to some subcontractors and took steps to improve the factories.
"We've built a very robust program of looking at supply chain issues," said Nike spokesman Erin Dobson. "Anyone will tell you with these massive supply chains, you can't catch everything as much as you believe you can."
The more popular the product, the more scrutiny is required for companies.
"The issue is, if you have a brand name now, you need to be sure your suppliers are performing the work on site and you can monitor all the work," said John Horan, publisher of industry newsletter Sporting Goods Intelligence.
"Obviously, not just looking at the final product and seeing it's the right color," he said.
And in the wake of recent quality issues, Kellogg's Grayson maintains that Mattel and other U.S. manufacturers will now be charged with an equally difficult task: "to reassure consumers ... greater controls have been put in place to keep the same thing from happening again."
(Additional reporting by Alexandria Sage)

Wednesday, August 22, 2007

Feeling the Direct Effects of Reverse Brain Drain

Gee, I wonder if this has anything to do with why I've been flooded with actual job-offers (not just interviews) lately:

Tougher US immigration leading to 'reverse brain-drain': study
Wed Aug 22, 12:53 PM ET
The huge backlog in US immigration visas is leading to a "reverse brain-drain" that will force skilled workers to return to their home country, a report released Wednesday concludes.
The study by the Ewing Marion Kauffman Foundation found that more than one million potential immigrants, including scientists, engineers, doctors and researchers, are competing for 120,000 permanent US resident visas each year.
The report said some applicants must wait several years, in part because the number of employment visas issued to immigrants from any single country is fewer than 10,000 per year.
"The United States benefits from having foreign-born innovators create their ideas in this country," said Vivek Wadhwa, a Harvard Law School fellow and co-author of the report.
"Their departures would be detrimental to US economic well-being."
The study by researchers at Duke, New York and Harvard universities is the third in a series of studies focusing on immigrants' contributions to the US economy.
In this study, "Intellectual Property, the Immigration Backlog, and a Reverse Brain-Drain," the researchers concluded that the number of skilled workers waiting for visas is significantly larger than the number that can be admitted to the United States.
"This imbalance creates the potential for a sizeable reverse brain-drain from the United States to the skilled workers' home countries," the foundation said.
The report said a majority of immigrant company founders, including many in the tech sector, came to the United States as students. Many ended up staying in the United States after graduation, with a number founding new companies.
It said 31 percent of the startups in tech centers had an immigrant key founder, including 52.4 percent in California's Silicon Valley.
The researchers said Indian immigrants founded more companies than those from the next four countries -- Britain, China, Taiwan and Japan -- combined.
They also concluded that foreign nationals living in the United States were inventors or co-inventors in 25.6 percent of international patent applications filed from the United States in 2006.
The total number of applicants and their family members waiting for permanent residence in the United States in 2006 was estimated at 1,055,084. Additionally, there were some 126,421 residents abroad waiting for visas, making a worldwide total of 1,181,505.
"Given that the US comparative advantage in the global economy is in creating knowledge and applying it to business, it behooves the country to consider how we might adjust policies to reduce the immigration backlog, encourage innovative foreign minds to remain in the country, and entice new innovators to come," said Robert Litan, vice president of research and policy at the Kauffman Foundation.

Tuesday, August 21, 2007

One in four read no books last year


One in four read no books last year
By ALAN FRAM, Associated Press Writer 59 minutes ago
There it sits on your night stand, that book you've meant to read for who knows how long but haven't yet cracked open. Tonight, as you feel its stare from beneath that teetering pile of magazines, know one thing — you are not alone.
One in four adults read no books at all in the past year, according to an Associated Press-Ipsos poll released Tuesday. Of those who did read, women and older people were most avid, and religious works and popular fiction were the top choices.
The survey reveals a nation whose book readers, on the whole, can hardly be called ravenous. The typical person claimed to have read four books in the last year — half read more and half read fewer. Excluding those who hadn't read any, the usual number read was seven.
"I just get sleepy when I read," said Richard Bustos of Dallas, a habit with which millions of Americans can doubtless identify. Bustos, a 34-year-old project manager for a telecommunications company, said he had not read any books in the last year and would rather spend time in his backyard pool.
That choice by Bustos and others is reflected in book sales, which have been flat in recent years and are expected to stay that way indefinitely. Analysts attribute the listlessness to competition from the Internet and other media, the unsteady economy and a well-established industry with limited opportunities for expansion.
When the Gallup Poll asked in 2005 how many books people had at least started — a similar but not directly comparable question — the typical answer was five. That was down from 10 in 1999, but close to the 1990 response of six.
In 2004, a National Endowment for the Arts report titled "Reading at Risk" found only 57 percent of American adults had read a book in 2002, a four percentage point drop in a decade. The study faulted television, movies and the Internet.
Who are the 27 percent of people the AP-Ipsos poll found hadn't read a single book this year? Nearly a third of men and a quarter of women fit that category. They tend to be older, less educated, lower income, minorities, from rural areas and less religious.
At the same time, book enthusiasts abound. Many in the survey reported reading dozens of books and said they couldn't do without them.
"I go into another world when I read," said Charlotte Fuller, 64, a retired nurse from Seminole, Fla., who said she read 70 books in the last year. "I read so many sometimes I get the stories mixed up."
Among those who said they had read books, the median figure — with half reading more, half fewer — was nine books for women and five for men. The figures also indicated that those with college degrees read the most, and people aged 50 and up read more than those who are younger.
Pollyann Baird, 84, a retired school librarian in Loveland, Colo., says J.K. Rowling's Harry Potter fantasy series is her favorite. But she has forced herself to not read the latest and final installment, "Harry Potter and the Deathly Hallows," because she has yet to file her income taxes this year due to an illness and worries that once she started the book, "I know I'd have to finish it."
People from the West and Midwest are more likely to have read at least one book in the past year. Southerners who do read, however, tend to read more books, mostly religious books and romance novels, than people from other regions. Whites read more than blacks and Hispanics, and those who said they never attend religious services read nearly twice as many as those who attend frequently.
There was even some political variety evident, with Democrats and liberals typically reading slightly more books than Republicans and conservatives.
The Bible and religious works were read by two-thirds in the survey, more than all other categories. Popular fiction, histories, biographies and mysteries were all cited by about half, while one in five read romance novels. Every other genre — including politics, poetry and classical literature — were named by fewer than five percent of readers.
More women than men read every major category of books except for history and biography. Industry experts said that confirms their observation that men tend to prefer nonfiction.
"Fiction just doesn't interest me," said Bob Ryan, 41, who works for a construction company in Guntersville, Ala. "If I'm going to get a story, I'll get a movie."
Those likeliest to read religious books included older and married women, lower earners, minorities, lesser educated people, Southerners, rural residents, Republicans and conservatives.
The publishing business totaled $35.7 billion in global sales last year, 3 percent more than the previous year, according to the Book Industry Study Group, a trade association. About 3.1 billion books were sold, an increase of less than 1 percent.
The AP-Ipsos poll was conducted from August 6 to 8 and involved telephone interviews with 1,003 adults. It had a margin of sampling error of plus or minus 3 percentage points.

Thursday, August 16, 2007

Toy recall sparks alarm over 'Made in China,' but U.S. firms share blame

Toy recall sparks alarm over 'Made in China,' but U.S. firms share blame By Tim Johnson and Kevin G. Hall, McClatchy NewspapersThu Aug 16, 10:09 AM ET
BEIJING — This week's product recall by toy titan Mattel Inc. is the latest black eye for the "Made in China" label, but experts here and abroad believe that U.S. manufacturers and importers share the blame by putting relentless pressure on Chinese suppliers to deliver lower prices to American consumers.
"Everybody is pushing, pushing, pushing for lower and lower prices. The vendors are squeezed to the point where they aren't making a profit anymore. So they are looking to cut corners," said Peter Dean , a former U.S. toy company executive who now teaches at Hong Kong Polytechnic University .
The squeeze on China's manufacturers, led by big retail names like Wal-Mart and Target , means low prices and low inflation for U.S. consumers. But perversely, it may now be giving an incentive for Chinese manufacturers to cut corners or outright cheat.
Carter Keithley has heard that toy manufacturers in China are getting squeezed. But as president of the New York -based Toy Industry Association , which represents U.S. toymakers and toy importers, he's not sympathetic.
"It is absolutely forbidden to cut corners on safety simply because their costs are going up in other areas. I don't know where they are getting squeezed on costs, but it is irrelevant," said Keithley. "Our manufacturers have to source toys that conform to our safety standards. There is no alternative to that."
But if that's the reality for selling into the U.S. market, here's the reality for China's factories, which now produce nearly 80 percent of the world's toys. They operate in an environment of lax regulation, dirt-cheap labor and intense competition. And they understand that there's little direct U.S. regulation of product-safety standards. The U.S. Consumer Product Safety Commission relies almost entirely on the toy industry's ability to police itself.
Toy manufacturing has gradually left the United States over the past two decades. The 1994 North American Free Trade Agreement accelerated the exodus to Mexico , and China's entry into the World Trade Organization in late 2001 then shifted those jobs across the Pacific.
U.S. imports of Mexican-made toys fell from $1.28 billion in 2002 to $646 million in 2003, the second year after China's entry into the world trading system. Meanwhile, U.S. toy imports from China were valued at $14.8 billion in 2002 but rose to $22.2 billion last year.
"It isn't unusual that at this level of export and economic growth they have these (safety) problems," said Jaime Zabludovsky , formerly Mexico's top trade negotiator and now publisher of Inteligencia Comercial, a trade newsletter. "Geography counts. Mexico had these problems 20 years ago."
As Chinese companies are pushed by toy companies to do more internally on safety, they're being pulled in the other direction by giant retail cost-cutters like Wal-Mart and Target . These companies import so much from China that it affects the broader U.S. economy. Wal-Mart in 2004 imported $18 billion worth of goods from China, more than 9 percent of all U.S. imports from China.
Meeting with economic writers last week, President Bush stressed that "one of the reasons why inflation remains low in the face of rising energy prices is imports from China."
While American shoppers reap the benefits of low inflation, the low-cost Chinese manufacturers have seen their labor costs rise by a third since late 2005. The costs of steel, plastics and a wide array of other raw materials used to make products are going up. And fuel prices have sent transportation costs soaring in recent years.
"You're looking at this sort of economic nightmare, where you are pushed to deliver a cheaper product, while all your costs are going up. People are feeling pushed," said Christopher Byrne , an independent analyst in New York who closely follows the toy industry. "There's no defense for doing it, but I understand why someone would feel they have to cut costs somewhere."
Mattel , the world's largest toy company, said Tuesday it was recalling 19 million toys with either lead-tainted paint or containing small, powerful magnets that could harm children if swallowed. The recall affects toys marketed in North America , Europe , Australia and elsewhere.
Less than two weeks ago, Mattel issued an earlier recall for another 1.5 million Chinese-made toys with lead-tainted paint.
"Every company will constantly be looking to where it is most effective to produce ... but our Number 1 priority is always the safety of children. You cannot put a price tag on that," said Michele Sturdivant , a Mattel spokeswoman in El Segundo, Calif.
Mattel said Tuesday the lead paint used on its imported toys came from a subcontractor that had been given lead-free paint but did not use it. It did not offer proof.
Asked why the subcontractor did not use the lead-free paint it was provided by Mattel , Sturdivant acknowledged it seemed odd and said "we're trying to get to the bottom of it. If they were given paint we don't understand why they didn't use it."
Some 65 percent of Mattel's toys are made in China, Sturdivant said.
Mattel and other U.S. toymakers this week pledged even stricter measures on what are already tight controls over their supply chain. But experts believe price pressures for labor and materials are causing companies to skirt monitoring and cut production costs further in China.
"There are thousands and thousands of factories. There's no way to monitor them all. There's a lot of cheating going on," said Anita Chan , a researcher on China's labor practices at the Australian National University in Canberra . "Everyone tries to . . . bribe the inspectors."
Major toy marketers, like Mattel , either operate their own factories or require suppliers to certify that toys have been tested for safety. But fraud still occurs.
"In China, making fake reports is quite common instead of sending toys for proper testing," said Janet Cheng , of the corporate social responsibility unit in the Hong Kong office of SGS, a Swiss-based private inspections and monitoring company. "Buyers call us and ask whether testing results are real or not."
Dean, who previously worked for Little Tikes, maker of durable indoor and outdoor toys, said Chinese factories routinely attest to the safety of their goods.
"This certificate was always worthless as far as I was concerned," he said.
China has been hit by a series of health and safety issues in the past six months involving melamine-tainted pet food, toothpaste laced with an ingredient in antifreeze, faulty tires, tainted seafood and other products. The massive worldwide nature of the latest toy recall compounds image problems for Chinese-manufactured goods.
"This is clearly bad for Brand China ," said Arthur Kroeber, managing director of Dragonomics Research and Advisory in Beijing . "If a country is associated in a big way with inferior or hazardous goods, once that perception is established, it takes a long time to overcome."
Maryanne McGerty-Seibert , spokeswoman for the Consumer Product Safety Commission , acknowledged that about 60 percent of the more than 400 product recalls this year are products made in China.
China's mounting pressures in the manufacturing sector were driven home with an exclamation point on Monday, when Zhang Shuhong, who ran the Lee Der Industrial Co. Ltd , was found hanged to death in a warehouse. Lee Der made 967,000 pre-school toys that Mattel recalled earlier this month because the toys contained paint with excessive amounts of lead.
"He was probably one of the less exploitative manufacturers in China. He had a conscience," said Steve Tsang , a scholar of contemporary China at Oxford University in England .
Experts agreed that moving production out of China would not necessarily make consumer goods safer given other issues in global production.
"Where would you go right now? If you go to Thailand , they just don't have the capacity and the knowledge base," Dean said. "I'm not sure they'd be any more reliable. . . . The reliance on China is paramount."
China's leaders have taken high-profile measures to assure the world of their concern about product safety, including executing the former head of the Food and Drug Administration last month after a corruption conviction.
(Johnson reported from Beijing , Hall from Washington .)

Wednesday, August 8, 2007

Big Dig: The maximum penalty for a company charged with manslaughter in Massachusetts is $1,000

As a follow up to:
my previous post on the Big Dig

Today's news:

By STEVE LeBLANC, Associated Press Writer
August 8, 2007

Powers Fasteners Inc., was charged with one count of involuntary manslaughter, Attorney General Martha Coakley said. The Brewster, N.Y.-based firm was the only company involved in the construction and design of the tunnel to be indicted by the Suffolk County grand jury, Coakley said.

A report from the National Transportation Safety Board released last month found the July 10, 2006, collapse could have been avoided if designers and construction crews had considered that the epoxy holding support anchors for the panels could slowly pull away over time.


Prosecutors said Powers Fasteners knew the type of epoxy it marketed and sold for the nearly $15 billion project was unsuitable for the weight it would have to hold, but never told project managers.

"They failed to make that distinction clear," said Paul Ware, hired as a special investigator by Coakley.


In the report released last month, federal investigators spread blame for the collapse among the many corporations, consultants and engineers involved in the Big Dig project, the most expensive highway project in U.S. history.

Tuesday, August 7, 2007

Rep. Bernard Sanders vs. Fed Chairman Alan Greenspan

Cramer melts down. Markets, too?

Contracting Government Work: Vicarious Liability and Accountability

I'm reprinting this excellent post from Nathan Newman's blog at

July 18, 2006Big Dig Death: Corruption of Privatization
The death last week due to faulty construction in the "Big Dig" construction project in Boston should be seen as a canary in the coal mine of the corruption and even murder due to privatization in this country.

A lot of conservatives might try to blame this on Massachusetts liberals, but the actual management of the project was handed over to the often GOP-allied Bechtel Corp. See this Boston Globe website for a decade plus of stories on privatization problems, but here are some key stories tracing the problem:

1994: Project poses a test for privatization- "Bechtel head of a private partnership that will ultimately receive as much as $2 billion in contracts for managing the $7.7 billion Central Artery/Third Harbor Tunnel project...The conflict of interest, critics say, is that Bechtel is overseeing a project that it designed itself. Bechtel, as the lead firm in the joint venture responsible for managing the project, is also responsible for completing up to 40 percent of the engineering design work in some sections."

2004: Big Dig found riddled with leaks- "Engineers hired to investigate the cause of September's massive Big Dig tunnel leak have discovered that the project is riddled with hundreds of leaks that are pouring millions of gallons of water into the $14.6 billion tunnel system. While none of the leaks is as large as the fissure that snarled traffic for miles on Interstate 93 northbound in September, the breaches appear to permeate the subterranean road system, calling into question the quality of construction and managerial oversight provided by Bechtel/Parsons Brinckerhoff on the massive highway project."

But here's my favorite story, which is a story about how the workers on the project knew Bechtel's management was a clusterfuck but were ignored:

2006: Workers doubted ceiling method- "Field tests by construction workers indicated that bolt-and-epoxy fasteners might not support the multi-ton ceiling panels in the Interstate 90 connector tunnel, but the firm that designed the tunnel persuaded Big Dig officials to use the system anyway, law enforcement officials said yesterday...The engineers also said they have discovered documents showing that Bechtel managers were aware that the wall breached this fall was deficient from the moment it was built in the late 1990s, yet did not order it replaced and did not inform state officials of the situation."

READ THAT LAST PARAGRAPH. Bechtel had workers complaining and documents showing that the roof in the tunnels were faulty, yet they covered it up, no doubt because they wanted to save money.

This is what comes from handing management of public projects to private entities with a conflict-of-interest between protecting the public and maximizing their own profits. And of course at the federal level, we've seen the frauds perpetuated by Haliburton and company.

Unfortunately, this kind of privatization is accelerating across the country, not just in construction projects but in handling children in foster care, evaluating health care systems and a range of other public services. But progressives should be focusing on the story of the Big Dig as one more example of why profit-making companies shouldn't be trusted to manage in the public interest.

Posted by Nathan at 10:59 AM

Thomas Tamm, Libby: Equal Treatment?

A day after the FISA bill passes...

Excerpt from:

Aug. 13, 2007 issue - The controversy over President Bush's warrantless surveillance program took another surprise turn last week when a team of FBI agents, armed with a classified search warrant, raided the suburban Washington home of a former Justice Department lawyer. The lawyer, Thomas M. Tamm, previously worked in Justice's Office of Intelligence Policy and Review (OIPR)—the supersecret unit that oversees surveillance of terrorist and espionage targets. The agents seized Tamm's desktop computer, two of his children's laptops and a cache of personal files. Tamm and his lawyer, Paul Kemp, declined any comment. So did the FBI. But two legal sources who asked not to be identified talking about an ongoing case told NEWSWEEK the raid was related to a Justice criminal probe into who leaked details of the warrantless eavesdropping program to the news media. The raid appears to be the first significant development in the probe since The New York Times reported in December 2005 that Bush had authorized the National Security Agency to eavesdrop on the international phone calls and e-mails of U.S. residents without court warrants. (At the time, Attorney General Alberto Gonzales said of the leak: "This is really hurting national security; this has really hurt our country.")

Gee, I wonder if he'll get the same treatment Libby did.

Laffer's Napkin, Reagan's Voodoo Economics Live On

And I thought Bush was an idiot for talking like it was a truism.

For background on whether lowering taxes can INCREASE revenue (aka Reaganomics, Supply Side Economics, Trickle Down Economics, Voodoo Economics) I highly recommend:

Personally, I did a paper on the elasticity of Labor Supply and found it to be rather inelastic. This is all the more so because now most households are locked in to a two income earner situation. The fact that this is all the more so in 2007 than it was in 1980 makes any notion of Reaganomics at this point in history all the more absurd.


Laffer Press Roundup
06 Aug 2007 11:38 am

Here's an interesting test case for the press. It seems that at yesterday's GOP debate, Rudy Giuliani derided the idea that higher taxes raise revenues as a "Democratic, liberal" assumption and put forward his alternative view that you generate revenue by lowering tax rates. This is a stunning confession of total ignorance of tax policy and economics by the GOP front runner. So how did the press cover it? Chris Cilizza at the Fix lives down to my expectations by totally ignoring the fact that Giuliani is incorrect:

"There is a liberal Democratic assumption that if you raise taxes, you raise more money," said Giuliani to huge applause from the crowd assembled at Drake University.

Michael Shear in The Washington Post's page A1 story also doesn't care about the merits of the issue:

"Former New York mayor Rudolph W. Giuliani sparked loud applause when he declared that "the knee-jerk liberal Democratic reaction -- raise taxes to get money -- very often is a very big mistake." And Rep. Duncan Hunter (R-Calif.) declared his disappointment in the Democratic push to end the war in Iraq."

Nor does Stephen Braun of The Los Angeles Times care at all whether or not GOP tax policy makes sense:

"Referring to last week's devastating bridge collapse in Minneapolis, the GOP rivals found common ground in insisting that increased private investment from cutting taxes would provide more money to repair the nation's failing infrastructure. And they teamed up in turning their aim at the Democratic Party's presidential field.
Mike Glover at the AP doesn't seem to mention the issue at all. "

Adam Nagourney at The New York Times, by contrast, doesn't go nearly as far as I'd like, but does way better than his colleagues at the major papers. Here he is on the NYT political blog:

"Mr. Giuliani proceeded to explain that when he was mayor of New York he had cut taxes, and that those tax cuts had produced revenues that allowed him to finance bridge reconstruction. (Actually, there’s a good argument that it was the stock market boom in New York that brought all that money into the city’s coffers, but we’ll let that pass for now)."

And here he is teamed up with Michael Cooper in the print edition:

"Mr. Giuliani said that as mayor of New York, he had increased revenues to pay for bridge and road repair by cutting taxes, thereby jolting the economy, and that he would do the same thing as president. The city’s treasury in that period was flush largely with revenues produced by the stock-market boom of the late 1990s."

It'd be nice to see reporters go further than Nagourney does here, but improvements at the margin deserve recognition and the Times is doing a much better job than the Post here.

Monday, August 6, 2007

The History of Nixon and the Future of Cheney

I liked where this video was going, but they could have used much more relevant Cheney clips.

Outsourcing Government Work

Ever since the Big Dig fatalities, I've been critical of the extent that government outsources work to contractors. Today's Washington Post has a relevant take:

Meanwhile, a much quieter revolution was brewing: The federal government outsourced more and more of its functions to private contractors, a shift driven partly by the free-market ideology of the Reagan era and partly by necessity. There were now too many tasks for agencies to do by themselves. As Paul C. Light of New York University has shown, the "federal government" we all know -- the superstructure of agencies and federal employees -- has shrunk while its actual size, including contract and grant employees and projects, is larger than ever.

Here's the rub: Outsourcing eliminates incentives to perform well and shields contractors from accountability.

From The Can't-Do Nation.

Link to Paul C. Light's work:

Unemployment in U.S. vs. Europe

Anytime someone tries to point out how wonderfully productive the US economy is compared with Europe, ostensibly because of less restrictive labor laws, and points to the ostensibly low US unemployment rate, remember to pull out the Labor Force Participation Rate (which corrects for the unemployment rate's not showing long term unemployed):
Current stats for US:
As of July 2007, the U.S. is at 66.1.

OECD stats for 1999

CountryLabor Force Participation Rate
Sweden 75.7
France 68.5

I'll try to get more current OECD stats.

Friday, August 3, 2007

Truth About Tillman Murder

Eksow has a good post at the Huffington Post: Truth About Tillman Murder.

I'd like to thank Randi Rhodes for bringing this issue to my attention several months ago.

The Big Lie Machine

Disturbing point made by this blogger on DailyKos

In 2000 their man was a braggart and a bully while their opponent was a man who was almost universally recognized to be one of the most fundamentally honest and decent men in government. And so they impugned his character and ran of a platform of returning integrity to the office.

In 2004 their man was the same braggart, and a man who had dodged the draft. Their opponent was a bona fide war hero.

They impugned his masculinity and his courage.

This year, they don’t have their candidate yet (though they have decided who ours should be -- a point I will touch on later). But recent events suggest that they have decided on their strategy. Having created an environment of corruption and greed unmatched since the Harding administration, and having paralyzed government with obstructionism, and having utterly destroyed our nation’s standing in the world and having stretched our military to the breaking point, what could they possibly run on?

Clean, effective government and responsible foreign policy.

Think they won’t try it?

Think again.