Cartoon of the day

Special mention

Cartoon of the day

Special mention

 

Cartoon of the day

Special mention

 

This time is NOT different

The death toll from beneath a collapsed garment factory in Dhaka, Bangladesh was pushed beyond 500 people on Friday, with the number expected to grow as more rubble is slowly removed.

The Associated Press is reporting that the rising number makes the 24 April disaster the worst of its kind in “world history.” It certainly is the deadliest garment-factory accident in world history—surpassing the 1911 Triangle Shirtwaist Factory fire in New York City (which caused the death of more than 100 garment workers) and the 2012 Dhaka Tasreen Fashions fire (which killed at least 112 workers).

But it’s certainly not the worst industrial accident, if we take into consideration such events as the 1906 Courrières, France mine disaster (in which 1,099 workers died) or the 1947 Texas City Disaster (in which a series of explosions and fires that started onboard a docked ship named the Grandcamp killed a minimum of 578 people).

The only way to make this time truly different is to follow the advice of Ananya Mukherjee and Darryl Reed, who argue we need to go beyond standard market paradigms, including the creation of “better” or more ethical consumers:

Huge struggles need to be waged to secure basic rights, which should have been guaranteed without a quibble. A more radical solution — that gets closer to the root problem of the lack of control — involves the development of co-operatives and worker-owned firms. Many countries have rich co-operative traditions, which need to be supported. For workers, they can mean the difference between life and death. Obviously, if the Bangladeshi workers were unionized, they could not have been forced back into a structurally unsound building. But if they could own their workplace, such a building would never have been built.

Exciting new experiments in co-operative ownership are being spawned in many countries. While the most well known of these are associated with food-related movements, others are also emerging in the manufacturing sector.

Building on co-operative principles, these initiatives involve brilliant organizational and legal innovations to adapt to local conditions. They are also trying to give voice to marginalized groups, such as women and indigenous communities. If we hope to contribute to their struggles for justice, we must support such initiatives by workers (and producers) that provide them greater decision-making power over the conditions of their work.

Cartoon of the day

Special mention

 

401(k) world

Friends often ask me when I plan to retire. My response is, in 6 years—or perhaps 16 years.

That’s because I and hundreds of millions of my fellow citizens now live in what Thomas Friedman refers to as a “401(k) world.”

For Friedman, it’s a world of individual promise:

We now live in a 401(k) world — a world of defined contributions, not defined benefits — where everyone needs to pass the bar exam and no one can escape the most e-mailed list. . .

If you are self-motivated, wow, this world is tailored for you. The boundaries are all gone. . .Your specific contribution will define your specific benefits much more.

But for the rest of us, the 401(k) world—a world of defined contributions retirement programs, instead of defined benefits—is just a giant scam in which employers have managed to shift all the risk of saving for retirement onto their employees and the financial industry captures a new set of fees. Sure, employers (some of them at least) have to distribute some of their gross profits to their employees’ retirement accounts, and the employees have to come up with another portion out of their wages and salaries. But the risk is all with the employees, since their actual retirement savings depends on what happens in equity and bond markets. Once their initial contributions have been made, employers no longer have to worry about coming up with the funds to keep pensions fully vested. All the risk falls on the employees—and the gains accrue to the lucrative area of managing both employer-mandated and 401(k) retirement accounts.

Matt Yglesias has some sense of what’s going on:

the problem with living in a 401(k) world is that Planet 401(k) is a pretty sucky planet. Here’s the essential shape of 401(k) as a backbone of the retirement system:

— Poor people get absolutely nothing.

— Wealthy people who would have had large savings anyway get a nice tax cut that offers no meaningful incentive effect

— For people in the middle, the quantity of subsidy you receive is linked to the marginal tax rate you pay—in other words, it’s inverse to need.

— A small minority of middle-class people manage to file the paperwork to save an adequate amount and then select a prudent low-fee, broadly diversified fund as their savings vehicle.

— Most middle-class savers end up either undersaving, overtrading, investing in excessively high-fee vehicles or some combination of the three.

— A small number of highly compensated folks now have lucrative careers offering bad investment products to a middle-class mass market based on their ability to swindle people.

Felix Salmon has an even clearer view of what’s going on:

a 401(k) plan is an icon of futility and the way in which the owners of capital extract rents from the owners of labor. . .the 401(k) is a way for both your government and your employer to disown you, and to leave your life savings to be raided by the financial-services industry and its plethora of hidden and invidious fees.

All of which means, in a 401(k) world, employers and banks are making out like bandits, while the rest of us are forced to have the freedom to rely on whatever we can save for retirement, plus the vagaries of financial markets.

In Friedman’s world, we get what we deserve. In my world, I’ll be able to retire in 6—or 16—years.

Chart of the day

 

Actually two charts: corporate profits (a new record high) and wages (a new record low) as a share of Gross Domestic Product.

And Henry Blodget’s view is that

our current obsessed-with-profits philosophy is creating a country of a few million overlords (shareholders) and 300+ million serfs (employees).

It is also resulting in employees sharing less of the corporate wealth that they spend their lives creating than they ever have before.

That’s not what has made America a great country. It’s also not what most people think America or other lands of opportunity are supposed to be about.

I’d put it a bit differently: our current obsessed-with-profits philosophy is creating a country of a few million overlords (members of boards of directors of corporations, plus those who get a cut of the surplus they appropriate) and 300+ million wage-laborers (employees). It is resulting in employees sharing less of the corporate wealth that they spend their lives creating than they ever have before. That’s precisely what has made America a great country in the midst of a Second Great Depression. Even though it’s not what most people think America or other lands of opportunity are supposed to be about.

Cartoon of the day

Special mention

 

Cartoon of the day

Special mention

Cartoon of the day

Special mention