Wage Stagnation, The Depression, and Us

I can tell I’m only going to scratch the surface of these topics, so let me begin with the caveat that I’m just thinking through some ideas in this post.  I don’t actually propose to know something.

After reading Thomas Geoghegan’s essay Infinite Debt in Harper’s about how capital shifted from manufacturing into the financial sector and knowledge workers have nothing tangible to withhold and with which to demand higher wages, I began to wonder what happened in the 20′s leading up to The Great Depression.  Working for an internet startup, living in an era of bits vs. matter, and watching American car companies go bankrupt while I harbor a sense of “shouldn’t we buy subway passes instead of cars anyway?” I began to wonder if capital investments in manufacturing would be the answer now or were ever.

It wasn’t hard (to be honest I just looked at Wikipedia) to find a credible and widely respected theory (“popularized by Waddill Catchings and William Trufant Foster“) that blames The Great Depression on Calvin Coolidge’s low discount rate and a subsequent over-investment in manufacturing.  The titans of industry poured capital into building bigger and better factories that produced more and more stuff.  Profits went to the pockets of shareholders and to more machinery that produced more stuff. Profits did not go to wage increases, so, eventually, there were no consumers to buy the stuff.  With a drop in consumption came a drop of profits and capital investments and empty shareholder pockets and a crash of the stock market.

So, investing everything in manufacturing didn’t work and investing everything in the financial sector didn’t work.

Geoghegan also points to a breakdown of unions without which the worker could not demand the wage increases that might have kept the economy growing. There’s no doubt that steady wage increases are necessary within an economy that counts inflation as a staple. However, anyone who’s paying attention to the collapse of newspapers would find it hard to believe that unions can preserve wage increases in a time of mis-invested capital. (See The Boston Newspaper Guild’s battle with NYTimes Co. for evidence of unions being forced to make concessions no matter how strong they are.)

It seems to me that throwing all of our money at the sure bet, be it the booming factories of the early 20th Century or the booming banks of the early 21st Century, is not a sure bet at all.  In fact, it’s a pathway to failure. Perhaps it’s a fault of human nature bearing out in the market. People are followers.  They see The Joneses making money working at an investment bank, so they go do that. If you don’t see anyone making money as a innovator, you’re unlikely to believe that you could.  And so, instead of a world of people betting on innovation (with investments and career choice)–which, by definition, is merely the possibility of making money–we have a world of people following the trends. (And at the heart of it, isn’t that what makes you money in the stock market?  As more people want a stock, it increases in value. So, knowing what will be popular is what makes money in stocks–not knowing what will solve problems.)

I’m not quite sure what it would look like to have the majority of the population trying to innovate (maybe it would look like YouTube?).  We’d have more duds than stars, but we’d have more stars than we have now.  In any case, it seems like it’s worth a try.  Maybe the ‘cyclical nature’ of our economy has something to do with a lot of followers all trying to make money off of the same thing instead of building the next thing.

(At this point, I can’t help but think about Clay Shirky’s speech about the internet unleashing the builders, creators, and innovators of our society as people do more interacting than tv watching: Gin, Television, and Social Surplus.)

But, as I said,  I don’t know anything about this stuff. So, I’d love to hear from someone who does in the comments.

All The King’s Men

I watched All The King’s Men last night. It won the Best Picture Oscar in 1949, was written and directed by Robert Rossen and stars Broderick Crawford, who won the Oscar for Leading Actor.

Though an old movie, it’s themes are pertinent.  Broderick Crawford’s character (Willie Stark) is an underdog politician from a rural area who has big ideals and inspires the people through moving orations during which he promises the achievement of these ideals: free health care for all, the best public schools, and massive infrastructure projects that will create good jobs for the working class.  He inspires the working the class to take action and they vote for him in droves.  In the process of winning the election for governor, Willie makes a million deals with the devil in service of his ideals.  He continues to make these deals until he has lost everything–becoming much worse than the evil he had been fighting.

If you ever wondered about the emotional content and rationale behind many Americans’ fear of Socialism, this movie will help explain it to you.  Written shortly after the end of World War II, the message and the roots of the allegory are clear: Socialism offers a clear path to dictatorships.  The working class will think they lead the revolution but will only be living out a massive delusion until the upper class cleans up the mess.  At least, that’s what All The King’s Men is saying.

Bruce Springsteen Wikipedia Page

The above screenshot is of Bruce Springsteen’s Wikipedia Page immediately after his Superbowl halftime performance. I have no idea who inserted the lines about him being a ‘former Nazi soldier’ and marrying Barack Obama at a Bar Mitzvah, but they were definitely in there. When I refreshed the page about 2 mins. later, they were gone. Fast work, Wikipedia, but not fast enough.

For clarity’s sake, I did not make those changes, I just saw them and was amazed at the speed of Wikipedia.

Opportunities of Obama

Posts like Selflessness vs. Selfishness on avc.com talk about how the business world is thinking about taking advantage of Obama’s stimulus package in order to create new business opportunities and specifically how Fred Wilson would like to see businesses solve problems–not just exploit an infusion of cash.  If you produce alternative energy, build roads, or provide broadband infrastructure, the next four years could bring some very good tidings.

However, there’s Obama’s administration is not just stimulating industry with cash but also with their value system.  Obama’s commitment to Transparency and calls for Community Service will likely spurn a new wave of sites in three areas: Accountability, Volunteer Opportunities, and Facilitation.

Accountability

Obama’s pledge to transparency, especially regarding how his administration spends the money contained within the stimulus package, invites a problem: how do we hold him to it? There will be a massive amount of data to sort through, digest, and act upon. Obama will do some hand feeding through whitehouse.gov‘s Blog, Weekly Video Address, and Executive Orders Page, but the American people will likely be skeptical that the Administration is only telling us what they want us to know.  If we really want to hold him accountable, there will have to be third parties aggregating and organizing government data: bills, budgets…anything that’s public.  And once that data is sorted in a way people can understand, there’ll have to be a forum through which the American people can speak out about what they see.  TabsOnObama plans to do that, and don’t expect them to be the only ones.  It would be a bold statement for whitehouse.gov to link to these 3rd party sites, and I certainly hope they do.
Volunteer Opportunities

usaservice.org offers a list of volunteer opportunities sortable by geography, date, and tag and focusing on Martin Luther King Day aka National Day of Service. It’s a very nice site and I have already spent a great deal of time surfing it, but there are two problems with it.  The first is that it relies on organizations and individuals submitting opportunities to the site.  So, anyone who didn’t find the time to build an entry or offer something special for that day was left out. I’ll be looking for a site that crawls for volunteer opportunities, presenting a much larger number.  The second problem is it does little to help new organizations or people without organizations get off the ground, which brings us to the third area of opportunity.

Facilitation

Let’s say there’s a problem out there that really concerns me and Obama’s rhetoric has me all psyched up to do something about it.  The frequently tedious and complex logistics of building an organization, especially starting a 501(c)3 will likely intimidate me, take too long, and crush my enthusiasm.  I’m hoping to see an umbrella organization give nonprofit status to excited organizers and provide a forum to flesh out their ideas, find people to join them, and take action–all on the internet.  I’d love to see internet driven service projects to supplement the tried and true traditions of Food Drives, Book Drives, and Neighborhood Clean-Ups.  How can people take action and have impact quickly and with few barriers of entry?  That’s a problem the internet can address.

It’s going to be an exciting next few months.  Anyone working on something or know of an existing, relevant site?  Leave links in the comments.

(Thanks to Cory Forsyth for talking to me about this and helping me formulate my thoughts on it.)

The Truth Is Outing

Frank Rich wrote an incisive article in The Times documenting some of McCain’s recent missteps, miscalculations, misfires, and, well, mistakes.  The article and Katie Couric’s interview of Sarah Palin, some clips of which are embedded below, don’t require any commentary from me.

What I can comment on is this passage from the Rich column:

That was not the only bad news raining down on McCain. His camp knew what Katie Couric had in the can from her interview with Sarah Palin. The first excerpt was to be broadcast by CBS that night, and it had to be upstaged fast.

McCain did succeed in temporarily upstaging the Couric interview.  I, for one, didn’t watch it until this morning, 4 days or so after it originally aired. The key word, however, is temporarily. The interview is still widely available all over the internet and since its airing, I’ve received countless communications about it: emails, blog posts, Google Reader shares, Facebook postings, etc. etc.  Even though everyone was focussed on the debate through Saturday afternoon, the Couric interview did not and will not die until everyone who wants to see it does.

It’s another excellent example of the democratic power of the internet.  Campaigns, and even the mainstream media itself, have much less control over the news stream than they did even 4 years ago. The “American people” don’t just see what “they” want us to see.  More than ever, we see what we want to see.  And if I think a news item is particularly informative, it’s incredibly be easy for me to disseminate it. With several clicks, I can share it with my 300+ Facebook friends, share it on my Google Reader, put it on my blog, email it to friends and family, and, newly, post it to my NYTimes Network, not to mention highly popular services that I don’t use, like Digg, Mixx, and Yahoo! Buzz.  Distribution is suddenly, in large part, an operation of the masses.  We might be entering the Curation Generation, where we all collectively decide what’s important, what’s good, and finally, what gets attention.

So here I go with some distribution…well, where not all the way there yet…the embed function of the CBS News video isn’t really working with my hosted Word Press.  Here are some links:

sharelink(‘share’)On the Economy…

On Foreign Policy or Why Alaska’s Proximity to Russia Matters

Serendipitous Tweets

Best coincidentally consecutive tweets ever:

Barack’s Superstar Effect on Speeches

In Craig Robinson’s introduction of Michelle Obama during Monday night’s installment of the DNC, he talked about Barack Obama’s basketball game, saying he’s the kind of player who makes everyone around him better.  This is rather strong praise as the greatest players to ever grace the NBA courts were especially known for making their teammates better–Magic Johnson, Michael Jordan, and Larry Bird were particularly well thought of for this quality.  (Incidentally, Kobe Bryant is criticized for having a lot of learning to do in this department.)

Watching the DNC this week has led me to believe that Barack does not only make his fellow pick-up basketball teammates better, but he makes his political teammates better as well, most notably in the area of speech-making. Barack has raised the public speaking bar in the Democratic Party and everyone is striving to meet him.

We’re seeing it in everyone from Hillary Clinton to John Kerry to Federico Pena, Mayor of Denver–the Democrats are speaking with more energy, panache, passion, clarity, poetry, composure, and frankness than they have in the past two elections (which is all my young memory affords me to compare).  The most obvious improvment has been in Joe Biden, and it has come remarkably quickly.  If you watched his introduction as Obama’s running mate in Springfield, IL on Saturday, you would have seen a normal Joe Biden–a politician who spoke in fairly complete sentences and made an effort to connect with the audience but who didn’t really succeed.  Put next to a mere mortal, Biden’s speech wouldn’t have been alarming.  However, next to Obama, he more resembled a mediocre city councilman than the well-informed, extremly well qualified VP that he is. Obama’s prowess as a speech-maker made Biden look bad.

Cut to Biden’s speech at the DNC tonight.  He was a totally different performer.  He slowed down, employed dynamics (in both the emotional and musical sense of the term), utilized repetitive rhetoric (“That’s not change; that’s more of the same!”), and in the process expressed his best self–a straight-talking, passionate public servant. There’s not doubt in my mind that Biden watched the film of his intro in Springfield and thought, “I’ve got to step it up a notch or I’m going to embarrass myself in Denver.”  And step it up, he did, along with everyone else the Democratic National Committee invited to speak at the convention.

Back in the first 3 seasons of The West Wing, the hay day during which Aaron Sorkin was still writing every episode, I used to marvel at the speeches he would write for President Bartlett and I would dream of having a president who could speak like him and inspire me in the same way.  Barack Obama has far exceeded my real-life expectations on the inpirational speech-giving front, and even more to my surprise he’s managed to bring everyone else with him.

Two other notes for someone to take on in the comments:

1) I’ve noted that everyone is speaking better, but just how are they managing it? Did they all hire Barack’s coach?  Did they always have it in him and only now have been asked to rise to the occasion?  Are they taking advice from Barack?

2) I firmly believe that these speeches are not forsaking responsible policy-thinking, rationality, insightfulness, and nuance for the sake of showmanship. In fact, I’d say they are pushing the politicians to display more of these traits in their speeches.

and a wild card 3rd note) How tired and uninspiring does John McCain look now?