Productivity measurements and offshoring jobs

This guy says offshoring jobs results in measured productivity gain. Real productivity does not really gain and corporations not workers benefit. There is a lot of truth in this.

wage cutting for exports

I can see this happening. Eventually, this will be a wage-equalizing phenomenon between here and China. This is bad news for us, because we earn so much more than Chinese per capita. Methinks, this is the necessary conclusion to the inclusion of developing countries into the world economy. From Angrybear:

Yesterday I argued that Latvia's cost-cutting efforts are evident compared to a cross-section of European Union countries. Latvia's efforts, while commendable, were very much a function of the emergency IMF loan in December 2008 and the ensuing recession in 2009.

After an email exchange with Marshall Auerback, and thinking more about the cross-section of Europe, I now see a very scary trend emerging across Europe: the fight for exports.

To be sure, Latvia's efforts are of note, as the acceleration in hourly labor costs dropped from a 22% pace spanning 2007-2008 to just 2.8% in the first three quarters of 2009 compared to the same period in 2008 (the Eurostat data are truncated at Q3 2009).

But look at the similar wage-cutting behavior occurring across the European Union, especially in the Eurozone hopefuls (Latvia, Lithuania, and Estonia are preparing to adopt the euro in coming years).

The battle for exports has begun. Compared to the same period in 2008, Q1-Q3 2009 annual hourly labor costs growth are down 4.9% in Lithuania, 0.8% in the U.K., and 0.5% in Estonia. In fact, every country across the 26 countries listed except Belgium, Germany, Greece, and Spain, saw the rate of hourly wage growth decrease since 2008. The currency is pegged, so the only mechanism to increase external competitiveness is through price (wages) declines. To be sure, this growth model cannot work for the Eurozone as a whole.

Latvia's model: drop wages to increase export income. Greece: drop wages to increase export income. France, Germany, Spain, Portugal, etc., etc. It's impossible that the whole of the Eurozone will drop wages to increase export income. It's especially bad for countries like Latvia or Hungary, where the lion's-share of trade occurs withing the boundaries of Europe.

And what happens when export income does not provide the impetus for aggregate demand growth? Well, there's not much left. Can't devalue the currency (via printing money), and tax revenues will fall faster than a ten-pound weight: rising deficits; rising debt; rising debt service (via surging credit spreads). Sovereign default seems like a near-certainty somewhere in the Eurozone!

This article is crossposted at News N Economics

Rebecca Wilder

boomers fighting me for my job

Sometimes it helps to get back to the fundamentals. Michael Shedlock has shed some light on the implications on the housing market as a result of boomers staying in the work force.

# The labor pool participation rate will stay elevated instead of contracting as much as one might have thought. In turn ...
# The unemployment rate will stay elevated longer than economists think.
# Kids out of college will have a harder time finding jobs.
# Kids out of college will be forced to move back in with their parents.
# Kids out of college will have no way of paying back college loans.
# Parents who co-signed for their kids education will come to regret it.
# The above factors will pressure discretionary spending of both boomers and those just out of college.
# Those out of college will postpone family building.
# Postponement of family building will further pressure housing prices.
# Bankruptcies, foreclosures, credit card defaults, and walk-aways will continue longer than economists think.

Bruce Lee Philosophy

"Take no thought of who is right or wrong or who is better than. Be not for or against."

---Bruce Lee---

George Carlin's view of America

This guy has a point. I was thinking today, on how even people who claims to be a force for good quickly breaks down when self-interest is involved.

Favorite quote on currencies

Krugman wants a weaker dollar, Mundell wants a weaker Euro, Japan wants a weaker Yen, and everyone wants a stronger Yuan except China.

courtesy of Michael Shedlock.

Literally white winter olympics.for white people

I had the same feeling while watching the games on TV. At the end there was one little east asian girl at the end of the commercial for a second and a half. This is understandable because it's way easier for children and females of asian descent to get screen time than adult males. I won't get into the media bias here just read the following:

Mike Barber of The Huffington Post is the fellow asking:

In the weeks leading up to the 2010 Olympics in Vancouver, British Columbia (BC), Tourism British Columbia released a new commercial it spent millions of dollars on in order to promote tourism in the province. The fact that most of the world already knew the 2010 winter Olympics were being held there apparently was not enough. The commercial features notable Canadians Michael J. Fox, Sarah McLachlan, Ryan Reynolds, Kim Cattrall, Steve Nash, and Eric McCormack; what it doesn’t feature is much ethnic diversity.

There are two versions: the 90-second and the 30-second version. The version most are likely familiar with is the 30-second version. I say that because it is the only version I have personally seen aired on Canadian TV; I wasn’t aware the 90-second version even existed until I came across it while searching for the commercial on YouTube. In either case, it is clear the intended target amongst potential tourists are only those as white as the snow featured in the many expensive aerial shots.

Never mind the fact that all the celebrities featured are white, in this version of the commercial there is not a single tourist with a discernible race other than white to be found. There is a token nod to Aboriginal culture for literally a second towards the end, but that’s about the only thing “ethnic” you’re going to see in this version of the promo.

Did Tourism BC err on this or are all of our readily identifiable (in the US market) celebrities white like rice? I understand David Suzuki probably isn’t very big in Texas, but with the absence of any colour in the spot, Barber has a point, albeit a cynical one. Call me naive, but I prefer to think we’re so post-racial here that it never even occurred to the team that greenlit the ad. That said, ad creatives do think about these things, don’t they? I’d hate to think a meeting was held and it was decided that BC would be more marketable if it was portrayed as a rugged whitefest. One of the BC’s greatest strengths is its diversity. It’s something that should be celebrated and sung to the rafters, no?

Reason why I will not go to Russia, revisited.

If rich, white Americans will not be spared.  I sure as hell am not gonna go there.

Most important haiku this year

Financial Crises
Stalled too many customers
CEO no more

From the ex-CEO of Sun Microsystems.

On a tweet.  How times have changed.

My first published Letter to the Editor

After my rant on the selfish NIMBYs in maple ridge, I sent a letter to the Maple Ridge times.  They have published it, here.

Fist published letter ever.

How to get a cheap iPod Touch

 

Source

Alouette Lake

Courtesy of Maple Ridge Daily Photos

Future of University is online

I thought Kaplan ran a respectable outfit when I went there for prep courses.  I think students might benefit.  Harder to tell is the attitude change towards these degrees.

Kaplan University is offering students who have been squeezed out of CA community colleges the opportunity to take online classes toward their degree under a new agreement.

The agreement also allows California community college graduates to transfer to Kaplan to complete online bachelor’s degrees at a reduced tuition rate.

a) Innovative. b) Troubling. c) Emblematic of the future. d) all of the above. 

Hat tip The Narrow Bridge

Pop Psychology Fail

Pop psychologists, beware! In the current issue of Psychology Today, the magazine’s expert bloggers debunk some of our most cherished conventional wisdom, including popular social myths surrounding anger (no, “venting” doesn’t help), lying (it’s not about eye contact), and romance (Paula Abdul and her cartoon-cat-lover were wrong). The piece isn’t available online, but here are a few fun examples, with links to the Psychology Today blogs the magazine's experts call home:
Venting Reduces Anger One of my pet peeves is how widely the notion of catharsis has been accepted. People think they will feel better by “getting it all out” or even that a hockey game is a release for their aggression. Aggression begets aggression. People are better off taking a deep breath and counting to 10 than “venting” their hostilities. — Jann Gumbiner, Ph.D., professor at the University of California–Irvine College of Medicine 
Opposites Attract A persistent myth is that in romance, opposites attract. In fact, one of the most powerful predictors of liking is similarity, regardless of the type of trait—personality, values, interests, or physical characteristics. — Andrew Galperin, graduate student in social psychology at UCLA 
Men Aren’t Romantic Many people think men are less romantic than women. Yet men fall in love faster (because they are so visual); men tend to be more dependent on their girlfriends or wives for intimacy; men are over two times more likely to kill themselves when a relationship ends; and men show just as much activity in brain regions associated with romantic passion. — Helen Fisher, Ph.D., anthropology professor at Rutgers University

Courtesy of  UTNE

Football is bad for your brain

I heart Brazen Careerist.  I think her latest column is a good read.  Talks about Aspergers syndrome among other things.  Here is my favorite quote from the entry.

I hate the glorification of abnormal. People who are abnormal have an enormous struggle to find a place in the world. It’s not fun or glamorous. The celebration of abnormal is a delusional luxury of the relatively normal population.

For ages I have always looked at people who try to be "unique" with annoyance and possibly a fist to smack them down.  Overtime I have learned to tell them how unique they are while at the same time making a mental note of assigning them a drone number.  Oh and lastly, just because you conform to a lesser known, less mainstream group does not make you any more unique than the person who rocks out to Nickelback.

Hope and Dreams.

Anya Kamenetz, author of Generation Debt, and the new DIY U, is still my hero.


Here is a fresh dose of her optimism:

This month's issue of The Atlantic contains a long thoughtful and downcast article about the possible effects of long-term unemployment on the American national character.

One section in particular is very much up my alley: about how the shifting job market and how it might affect the Millennial generation. Graduating into a recession, it turns out, can afflict your income for a lifetime. "Seventeen years after graduation, those who had entered the workforce during inhospitable times were still earning 10 percent less on average than those who had emerged into a more bountiful climate."
As my sister Kezia, a 2009 Yale graduate, commented on Buzz: "UM....scary for peeps my age :(" And her friends chimed in , "Schnikies." " i had this article mentioned to me today during a job interview. needless to say, there was no real job being offered."
The article argues that Millennials are especially ill-equipped to deal with this unprecedented era of long-term joblessness because of their (supposed) crippling high-self esteem, and because they don't understand the meaning of hard work. It also argued that there are widespread socially negative effects of long-term joblessness--especially for men--include depression, alcoholism, and broken families.

But...I think there's a hole in this logic. It crystallized for me yesterday when I was part of a panel (including this technologist, this simplicity expert, and this social media maven) speaking to Professor Kyra Gaunt's Anthro 101 class at Baruch College. This was a very diverse group of 19 and 20 year olds and we were talking to them about hacking their way through the system to get what they need.

I realized that it's exactly this generation's unreasonable optimism that gives me the most hope for our future. Millennials aren't full of despair if we don't get the "perfect" job right out of college--our expectations are already adjusted. Young men are free from the demand that they automatically be breadwinners. Young people are learning to cultivate other values outside of work, and to take risks to seek work that meets their values. All that time we're spending inventing and building social networks and new ways of communicating with each other will translate into social capital and will serve us to build a society that doesn't depend on income to buy happiness. We will increasingly turn to each other to get what we need and to make what we want.

Yes, we still need to figure out better ways to get people health care and housing and education. The legacy problems of an economy in decline are not going away any time soon. But I have confidence that past performance does not have to guarantee future results. And this generation might just be the perfect people for this time.

Nudest colony warning

The sad thing is, I think this actually works.

Via failblog

Olympic rant, outsourced.

I enjoyed the games while it was here, but that doesn't prevent me from enjoying the critisms.

Wherein official sponsor of the 2010 Winter Games takes on those grumpy brits at The Guardian. "If you're going to say the Vancouver Games cost $6-billion, have the decency to note $4-billion is for infrastructure that was going to get built anyway".
OK, if we're going to have an honest discussion Gary, let's not argue on the price tag but ask how we're going to pay for it, and how long that's going to take? Let's just pretend that every cost expenditure was completely warranted, including the triple over budget convention centre next to a convention centre in the age of the internet. The Sea to Sky was going to get built anyways you say, but would Harriet Nahanee have died? The RAV Line was going to built anyways you say, but would we have ram-rodded it through council, inflated ridership numbers, forced it to go down Cambie, then switched to cut and cover at the last minute? Let's pretend Translink didn't go bankrupt forcing them to raise fares, tax parking stalls, and cancel the Evergreen Line. Let's pretend that the Athlete's Village didn't go bankrupt and we didn't bail them out under a shroud of secrecy. Let's pretend that VANOC did everything right and held open and transparent meetings and did its best to dissuade Olympic evictions, let's pretend they're not spending a billion on security, only to harass local activists. Let's pretend the Assistance to Shelter act was never passed, and that cops haven't been ticketing DTES residents for jaywalking. Let's pretend they didn't just publish a guide on how to be polite. Let's not even get into the free speech limitations. So let's pretend all of that is totally fine; how are we going to pay for it? I mean if all this was going to get built any how, you know even after a massive recession, how would we tell the public that we were raising taxes while cutting services? Oh yes that's right, the cheerleading local media.

More here from Beyond Robson.