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The other day, in a conversation with a friend (who happens to be an avid reader of this blog), I was asked why I don’t write more about events in Brazil, especially the most recent coup. I explained that, while I have been following events there pretty closely, I simply didn’t have the time to do what I considered the appropriate amount of research to offer an analysis that offered something different from what I’ve been reading.

I did, however, suggest to them that, given the class nature of the coup, the first thing the new government would do would be to set about undoing the legacy of the Workers Party.

Well, as Jonathan Watts reports, that’s exactly what’s happening:

It is just a week since Michel Temer became interim president of Brazil, but his new centre-right administration already has begun scaling back many of the social policies put in place by Workers’ party governments over the previous 13 years.

Moves are under way to soften the definition of slavery, roll back the demarcation of indigenous land, trim housebuilding programs and sell off state assets in airports, utilities and the post office. Newly appointed ministers also are talking of cutting healthcare spending and reducing the cost of the bolsa familia poverty relief system. Four thousand government jobs have been cut. The culture ministry has been subsumed into education.

For the interim government and its supporters, these austerity measures represent sound fiscal management as they attempt to rein in the government’s budget deficit and restore market confidence in Brazil, which has seen its sovereign debt rating downgraded to junk status over the past year.

For critics, however, they represent a shift toward a neoliberal economic policy by the old elite that ousted elected president Dilma Rousseff, who is suspended pending her impeachment trial in the senate.

That, in the end, is what the coup was about: not eliminating corruption (which is how it’s been covered here in the United States) but changing the class content of the policies of the Brazilian government.

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Many CEOs and top-level managers manage to capture an enormous share of the surplus as payment in exchange for working. That we know.

We also know that, while faculty salaries have stagnated, the size and salaries of collegiate athletic coaching staffs have soared in recent years.

Then there are those, like former-Notre Dame football coach Charlie Weis, who get their cut of the surplus for literally not working—for doing nothing.

As has been the case for many years, former Notre Dame football coach Charlie Weis again received more money from the university in a recent year than any Notre Dame athletics employee.

Weis — who was fired by Notre Dame in November 2009 — received what has become his customary $2,054,744 during the 2014 calendar year, according to the university’s new federal tax return.

That means Weis received more from Notre Dame in 2014 than all but two university employees listed on the return, which the school provided Monday in response to a request from USA TODAY Sports.

Vice President and chief investment officer Scott Malpass was credited with nearly $5.4 million in total compensation in 2014, including just over $1 million that had been reported as deferred compensation in prior years; Malpass’ total also included nearly $2.9 million in bonus pay. Michael Donovan, the school’s managing director for private capital investments, was credited with more than $2.3 million, including just under $400,000 that had been reported as deferred pay in prior years and more than $1.1 million in bonus compensation. . .

According to the school’s tax records, Weis received more than $6.6 million pay and severance in 2009. He subsequently has been paid nearly $10.3 million by Notre Dame from 2010 through 2014. The tax records say that Weis was due to be paid through December 2015.

During that time, Weis also worked as an assistant for the Kansas City Chiefs and the  University of Florida. In December 2011, he became the head coach at Kansas, which was paying him $2.5 a season until firing him in late September 2014 with more than $5.6 million owed him under that contract.

 

Disclaimer: I am an employee of the University of Notre Dame but I have no say in determining the pay of anyone, working or not.

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The argument I made 10 days ago about surprises—represented by Leicester City, Donald Trump, and Bernie Sanders—was meant as a reminder that the pundits are often wrong and unexpected events can, in fact, happen.*

But it is also the case that two of those examples are members of the oligocracy. Trump we all know about. Less known, as Toby Miller reminds us, is that the “Little Club That Could” is owned by King Power, whose boss is Thai oligarch Vichai Raksriaksorn.

King Power works with the controversial provincial strongman, machine politician, and fellow club owner Newin Chidchob, and thrives thanks to close ties to successive administrations and coup leaders. This is in keeping with Vichai’s status as someone who grew up with a cohort that gives and sustains favorable business conditions to those with the right political connections. It’s a well-established form of clientelism, and he plays it excellently.

Prior to winning the Premier League, Vichai’s singular sporting achievement was establishing the Thailand Polo Association. It connects him to global royalty, local military and police, and high society. The light of progressive glory and his relatives feature on the management committee, and have a British team linked to Leicester City.

In 2006, the body responsible for Thailand’s airports alleged that King Power had btained the retail concession and duty-free license for Suvarnabhumi Airport without an open bidding process. That governing board was soon replaced, and the scandal slipped into history, for all the world like Jamie Vardy’s anti-Asian casino rants or his red card against West Ham.  King Power is widely believed to be selling goods from the world’s priciest luxury brands outside airport duty-free shops to rich men and their wives and girlfriends, undercutting the brands in Bangkok’s boutiques and creating considerable bad blood for the likes of Gucci and Louis Vuitton.

As the  Bangkok Post wryly puts it, ‘King Power’s chief business acumen is in securing such monopolistic duty-free concessions in the first place and then to keep leveraging its myriad revenue streams. This is a murky area where business and politics intersect.’

No wonder the Financial Times says ‘Mr Vichai does not lack financial muscle and plays the same league as any football-club owning Russian oligarch or Gulf investment fund.’

So please, enough celebrating the happily lachrymose masculinity of the little club that could. Instead, let’s unleash some tears for those caught up in the exploitative nature of much Thai business life, or victims of the vicious “sport,” polo.

None of this diminishes the players’ achievement, the manager’s charm, or the fans’ pleasure. But the political-economic wonder that is the clue to the team’s popularity and romance should be investigated. The inequalities supped on by the likes of Leicester’s proprietors are no fairy tale come true, for all the winning of a Premiership.

I suppose that leaves the achievements of the Leicester players themselves and Bernie Sanders as the only real non-oligarchic surprises in the current season.

 

*And Nate Silver seems to agree: “it’s probably helpful to have a case like Trump in our collective memories. It’s a reminder that we live in an uncertain world and that both rigor and humility are needed when trying to make sense of it.” And, I would add, Leicester City and Bernie Sanders.

Chart of the day

Posted: 20 May 2016 in Uncategorized
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CEO-worker

The United States’ top 500 chief executive officers managed to capture 335 times the average worker’s wage last year, taking home $12.4 million on average, according to a new report by the AFL-CIO. That average CEO pay was a whopping 819 times the wage of a worker earning the federal minimum wage.

Here’s the list of the top 25 CEOs by pay—from Joe Kiani of Massimo Corp (at more than $199 million) to Jeff Immelt of GE (at just under $33 million):

CEOs

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Special mention

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Home alone

Posted: 19 May 2016 in Uncategorized
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Rich Americans aren’t only getting richer, distancing themselves financially from everyone else. They’re becoming more socially isolated from their fellow Americans, too.

A recent analysis of survey data from more than 100,000 Americans by Emily C. Bianchi and Kathleen D. Vohs finds that the rich spend significantly less time socializing with others and more time alone than low-income Americans. On average, they spend 6.4 fewer evenings per year in social situations. Wealthy people also spend less time with family members and neighbors compared to households with lower incomes—but they spend more time with friends.

It’s possible, of course, that people who put little value on social relationships may spend more time on their careers and accordingly have higher earnings than others. It’s also possible that people choose to interact less with individuals who have a lot of money.

Here’s the authors’ response to those possible limitations of their study (citations omitted):

First, although we reasoned that access to money influences how and with whom people spend their time, we cannot rule out the possibility that how people choose to spend time affects their income. People who put little value on social relationships may invest more in their careers and accordingly earn higher wages than others. Yet, the results showed that income is linked to different types of social engagement, even after accounting for time spent working. This suggests that the findings are not an artifact of discretionary time but instead relate to how people choose to spend that time. In addition, while we reasoned that access to more money affects how and with whom people elect to spend their time, we cannot rule out the possibility that circumstantial differences across incomes may drive the effects. For instance, greater household resources may be negatively associated with proximity to neighbors, thereby creating a structural impediment to social contact. Even so, this possibility could be a manifestation of the desire for social distance rather than a driver of these effects.

Second, our reasoning suggests that people with more financial resources voluntarily configure social worlds that are more autonomous and, when electing to be social, more geared toward friendship than family or community. Yet given that income is negatively associated with compassion and decoding social cues, it is possible that people with more money are less desirable interaction partners. As such, people may be less drawn to more prosperous relationship partners. If so, then the rich may inhabit different social worlds than the poor but for different reasons than our theorizing would suggest. Contrary to this reasoning, we found that income was positively associated with time invested in friendships, the most voluntary of the relationship types we examined. This seems to suggest that people with greater resources are deliberate architects of their social worlds.

In other words, the authors conclude, rich people have chosen to isolate themselves from others, especially family members and neighbors.

The combination of economic and social distance means that, unlike other Americans, rich people find themselves home alone.

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I was perplexed. I couldn’t figure out what all the fascination was with self-driving cars. Why all the investment in designing cars that could be operated with little or no hands-on attention by a human driver?

So, I asked a friend what that was all about, and he quickly responded: it’s really about trucks, not cars.

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In a country whose system of transporting commodities is insanely organized around highways and trucks (as against, e.g., railroads and trains), and where truck-drivers’ pay is once-again rising (average pay for long-haul truckers jumped 17 percent since the end of 2013, as against the 4-percent increase in average U.S. wages), it makes perfect—profitable—sense to design trucks that can operate without drivers.

Higher costs are driving shippers to reconfigure their supply chains. In August, Whirlpool Corp. opened a distribution center near a railroad spur outside Chicago so the company could load appliances directly from trains, avoiding the need to hire trucks. The amount of goods moved by train is also increasing—but trains can’t deliver to as many locations as trucks, which carry some two-thirds of cargo nationwide.

“Given the fact that the cost of transporting products over the road is rising, it has kind of forced us to rethink our distribution network strategy,” said Jim Keppler, Whirlpool’s vice president of integrated supply chain. “Driver pay is a big part of that.”

Self-driving trucks mean fewer workers (with their wages and benefits), more hours on the road (since robots don’t need to rest), and ultimately more control over driving and delivery (even when truckers are themselves wired these days to eliminate detours, stops, and other departures from more-profitable operation).

Apparently, it’s already legal to drive across Texas and Nevada with nobody at the wheel. . .