A Friend’s Solution (and warning) for the Economy

[Jason Rees]

I posted this on my Facebook page, Bill, but I'm interested to see what you think as well. Beyond the first two sentences, I can't claim credit for any of it, but I was deeply impressed with what my friend had to say on the subject.

A Friend’s Solution for the Economy

A friend of mine in Arizona is a former stockbroker. This is his prescription and warning on the economy:

They need to prosecute the CEO's who betrayed the public trust. They need to prosecute the gov regulators in the SEC who let this come apart. They need to re-write the investment laws. The NASD is part of the problem; it's one of the most unethical parts of the US financial system.

They also need to do what Roosevelt did during the great depression.
- close the banks.
- review all bank books.
- buy all the banks that are on shaky ground (including Citi and Bank of America).
- remove the boards of directors.
- Only let the banks that are run financially sound re-open, pledging the US government's seal of approval on their financial status
- re-open the federally owned banks, with a pledge guaranteeing their success; as well as a pledge to re-privatize these banks when the crisis passes.

Then they need to rewrite consumer lending laws... particularly CC and Home Mortgages; to penalize banks with possible criminal prosecution for deceptive lending practices, as well as tighten up federal regulations for lending.

70% of the problem at the moment is the banks haven't stopped lending to shaky customers, in an effort to improve their "on book assets". The way assets are calculated has to be changed, so that banks can't play a shell game with debt to make their bottom line look solid. No longer should outstanding debt be factored into money on hand.

They need to cap executive pay, and redo executive rules. Part of Wall Street’s problem is every blue chip CEO serves on the boards of 3 or 4 other blue chip companies. The business leadership in this nation is horridly inborn, creating a cronyism that spawns corruption. They vote each other raises, and collaborate on how to game the system.

They need to rebuild US heavy industry, which was effectively destroyed by NAFTA. Through massive expansion of rail construction, road construction, general infrastructure construction; and I mean trillions of dollars massive.

Finally they have to let the rest of the cards fall where they may. Capitalism without risk of failure just encourages bad business practices. The US government's stated policy position of "too big to fail" since the great depression, has done more for the damage to capitalism then any other policy. Most of the abuses can be tracked back to that.

It will hurt, if they do this. And it will be expensive. But it won't be throwing money down the well like they have been to date. And in 5 to 8 years, the system will recover, and be healthier for it.

Why does no one in government get this?

Because. This is not a plan to give money to Planned Parenthood and democratic mayors who've bankrupted their cities. Because, this is a plan to FIX the problem, that expects double digit unemployment for 3 or 4 years. Because this will destroy most of the lobbyists in Washington, and because the price tag for this "fix" could be in the 5 to 10 trillion rang by the end

But it's easier to sell "stimulus packages" which "promise" 3 or 4 million new jobs (while the economy bleeds 4 or 5) and only is 800 billion -1.3 trillion. The fix for the problem requires political courage, and the ability to look American's in the eye and say the system is f###### and needs fixing... and this will really hurt. Few politicians have that courage and Obama certainly isn't one of them.

Finally, Obama’s economic team is basically Rubin's team of yes men. Rubin and Greenspan are perhaps the two most responsible men in America for this mess. So Obama's made a team of "experts" out of the staff of the man who made this mess

When they had the debates in the fall I remember saying that neither candidate knew what to do. Its clear Obama still doesn't. Currently his strategy is to repeat the mistakes that made the problem. More loans to people who can't pay is his response. Expand TARP! This is the biggest disaster ever.

No... Obama’s team is a bunch of f##$$$$ idiots. TARP aka the first national bank of bad debt was created by bush to keep the house of cards from falling. Basically it was supposed to buy all the bad debt off the banks books at BOOK PRICE (not deflated market price), to restore liquidity. Then it was supposed to "make the debt good" in a function I’m still not certain how they expected to make work. And re-sell it. To date, TARP has eaten 1.4 trillion us tax dollars and still hasn't found a way to make the bad debt work.

Worse, TARP encourages banks to continue lending crap money. So they keep lending to people who can't pay them back, and the US government keeps buying it. It's a con, but it wasn't supposed to last long. BUSH was using it to keep the banking industry from collapsing on his watch. He knew it was a worthless stopgap that did nothing to fix the problem... just delay it. Yet instead of fixing the problem, Obama is throwing more money at TARP as if it's a solution. What kills us... is that OBAMA is calling it a loan... as if the US Taxpayers will ever see a dime of that money back. But we won’t. The congressional budget office is projecting that by the end of 2009 TARP could be a 10 trillion dollar black hole all by itself.

Let’s put these numbers in perspective: it took the US 173 years to build a 10.6 trillion dollar national debt. Obama will double that national debt in 1 year.

[Glenn]

They need to rebuild US heavy industry, which was effectively destroyed by NAFTA. Through massive expansion of rail construction, road construction, general infrastructure construction; and I mean trillions of dollars massive.

Finally they have to let the rest of the cards fall where they may. Capitalism without risk of failure just encourages bad business practices. The US government's stated policy position of "too big to fail" since the great depression, has done more for the damage to capitalism then any other policy. Most of the abuses can be tracked back to that.

I think there is a lot to comment on in this opinion piece, pro and con, but I will just single out these two successive sections and point out that they are contradictory. U.S. heavy industry declined in the free market, because the labor costs could not compete with labor costs elsewhere (and this occurred in the 1970s and 80s, before NAFTA...there was not much U.S. heavy industry left by the time NAFTA went into effect). You cannot argue to spend trillions to prop up U.S. heavy industry in spite of the market, and then turn around and argue that the market should determine success and failure.

The question becomes: Why stop with corporations? One could argue that capitalism and the market transcends countries as well as corporations, and that in true capitalism countries should be allowed to succeed or fail along with the corporations as those cards fall where they may. And in many cases, this has not been out of the realm of possibility. So why prop up a national economy if it is failing?

[Bill Glasheen]

I have mixed feelings about this, Jason.

I think it will take time for us to understand what caused the financial collapse. But I'm certainly not one of those who will place this squarely on the shoulders of the president whose administration saw the collapse. The forces were in play long before the financial house of cards collapsed.

I'm naturally quick to blame those who pressured Freddy and Fanny to pushing loans on people who had no business getting them. But there were so many parties who made a buck along the chain of events that one begins to lose track of who did what. Should everyone be given the opportunity to go for The American Dream? Absolutely. Is everyone prepared to take on the responsibilities required to own a home or manage credit? Absolutely not. And no amount of education will change that. As my Hampton Roads Academy classmate Bruce Hornsby wrote, "That's just the way it is. Some things will never change." Pareto's rules hold generation after generation, and culture after culture.

All we can do in a "free" society is make it possible to be rewarded for working hard and living within your means. Beyond that, it's up to the individual to make it - or not.

So what's the solution? Do we need more governance? Probably. Should government get involved? Only if it must. Should individuals be prosecuted? Not if the economic and social order created the incentives to thrive at the expense of others. That's just... bad government.

Truth be told, I think recessions are a necessary evil. They trim the fat out of the bull markets. Bad recessions hurt more, but then we've had some SERIOUS bull markets of recent. What goes WAY up like a bubble has to come crashing down.

Wiser men than I need to figure out where to go from here. But I'm not so sure that prosecution and more laws are going to solve all the problems.

And I'm with Glenn on NAFTA. Repealing it is a dumb idea. Some have argued that protectionism actually made The Great Depression as bad as it was. If countries discourage trade, then all products become more expensive for the consumer and producers have fewer customers for their products. If we suk at making some things, well... so be it. It doesn't mean we have to work for low pay and in slave-labor conditions. What it does mean is that a fair and just world will allow all societies to rise to their potential. And it also means that working smarter is the best way to fight people who will do more for less.

- Bill

[jorvik]

This makes interesting reading, although from a British percpective, I think it applies to all Western nations. I don't agree with it 100%

http://www.howitends.co.uk/how-we-can-help.php

[Glenn]

I don't know that I would call myself pro-NAFTA, but I do think NAFTA takes some underserved heat for things that had already occurred, or were occurring, before it took effect. That does not mean it is all positive though. But we do have to consider all possible effects, pro and con, before making changes.

From the labor standpoint it is difficult to not develop isolationist tendencies. It was tough for the blue-collar when industry jobs were being transferred oversees in mass in the 1970s and 80s, but labor eventually retrained into the financial and tech areas and the U.S. became a successful "post-industrial" country. But now those white collar jobs are also being transferred overseas, with greater ease since there is lower overhead in transferring white-collar compared to blue-collar. IT in particular is quickly ceasing to exist as an option for a career in the U.S. Theoretically any job that does not require frequent face-to-face or on-site interaction with a client can be easily offshored, and some estimates put that as close to 80% of U.S. jobs. (Realistically that would mean the U.S. imports virtually everything, including services, and exports nothing, so the U.S. could not survive such a rate of offshoring...hopefully that is not where we are heading, but in a free market, who knows?). So from a labor standpoint, what next? What is there that U.S. labor can retrain for, or retreat to, now? Wait for worker value in the U.S. to plummet and then get work being offshored from India and China as their incomes increase?

[Bill Glasheen]

With the understanding that we impart it will be easy for you to see the fatal flaws in almost all Government policies - UK or foreign. This prevents you needlessly expending energy trying to fathom policies that have to fail. We can teach you why so many serious yet apparently solvable issues are never resolved in a satisfactory manner by governments.

Someone after my heart!

we can train you to see why few important issues, like large parts of the renewable energy debate, can ever be implemented on a commercial scale - or will ever make commercial sense.

Amen!

All the noise about wind and solar power is just a bunch of propaganda hot air, designed to appease the green-minded. Mind you, I can't wait until we're completely free of Middle East oil. But carbon footprints and green energy are today a figment of our collective imagination. Nice idea, but...

There are important technologies that need to be developed NOW. We need nothing short of a Manhattan Project on battery technology so we can have electric and/or hybrid-electric vehicles in the next few years. Once you can store energy in a battery, then ANY energy source can drive an economy. That's an idea that everyone can get on board with.

But please... spare me the windmills.



- Bill

[Bill Glasheen]

Theoretically any job that does not require frequent face-to-face or on-site interaction with a client can be easily offshored, and some estimates put that as close to 80% of U.S. jobs. (Realistically that would mean the U.S. imports virtually everything, including services, and exports nothing, so the U.S. could not survive such a rate of offshoring...hopefully that is not where we are heading, but in a free market, who knows?).

This cannot go on ad infinitum, Glenn.

Presently the U.S. is the largest consumer. But unless they are producing, they cannot pay to consume. Ultimately a balance will need to happen.

As the cost of living goes up in both China and India, then many outsourced jobs will make their way back. I already see that in the software industry. Good software requires good quality control, and that isn't easy without constant communication in-between builder and internal/external customer.

Change hurts, and we don't know yet where this economic ship is headed. But fathom this. When the U.S. economy catches the flu, the world gets pneumonia. I note with interest how many Mexicans in this area are going back home because the jobs have dried up. And companies are talking about reigning in their outsourced labor.

Meanwhile, I note with interest how about 70% if a Honda Civic's parts are coming from this end of the globe. While Detroit suffers, Detroit South thrives.

The new equilibrium is forthcoming, and may define an entirely new business paradigm.

- Bill

[Bill Glasheen]

From today's Wall Street Journal. Very sobering.

- Bill

How Government Prolonged the Depression

By HAROLD L. COLE and LEE E. OHANIAN

The New Deal is widely perceived to have ended the Great Depression, and this has led many to support a "new" New Deal to address the current crisis. But the facts do not support the perception that FDR's policies shortened the Depression, or that similar policies will pull our nation out of its current economic downturn.

The goal of the New Deal was to get Americans back to work. But the New Deal didn't restore employment. In fact, there was even less work on average during the New Deal than before FDR took office. Total hours worked per adult, including government employees, were 18% below their 1929 level between 1930-32, but were 23% lower on average during the New Deal (1933-39). Private hours worked were even lower after FDR took office, averaging 27% below their 1929 level, compared to 18% lower between in 1930-32.

Even comparing hours worked at the end of 1930s to those at the beginning of FDR's presidency doesn't paint a picture of recovery. Total hours worked per adult in 1939 remained about 21% below their 1929 level, compared to a decline of 27% in 1933. And it wasn't just work that remained scarce during the New Deal. Per capita consumption did not recover at all, remaining 25% below its trend level throughout the New Deal, and per-capita nonresidential investment averaged about 60% below trend. The Great Depression clearly continued long after FDR took office.

Why wasn't the Depression followed by a vigorous recovery, like every other cycle? It should have been. The economic fundamentals that drive all expansions were very favorable during the New Deal. Productivity grew very rapidly after 1933, the price level was stable, real interest rates were low, and liquidity was plentiful. We have calculated on the basis of just productivity growth that employment and investment should have been back to normal levels by 1936. Similarly, Nobel Laureate Robert Lucas and Leonard Rapping calculated on the basis of just expansionary Federal Reserve policy that the economy should have been back to normal by 1935.

So what stopped a blockbuster recovery from ever starting? The New Deal. Some New Deal policies certainly benefited the economy by establishing a basic social safety net through Social Security and unemployment benefits, and by stabilizing the financial system through deposit insurance and the Securities Exchange Commission. But others violated the most basic economic principles by suppressing competition, and setting prices and wages in many sectors well above their normal levels. All told, these antimarket policies choked off powerful recovery forces that would have plausibly returned the economy back to trend by the mid-1930s.

The most damaging policies were those at the heart of the recovery plan, including The National Industrial Recovery Act (NIRA), which tossed aside the nation's antitrust acts and permitted industries to collusively raise prices provided that they shared their newfound monopoly rents with workers by substantially raising wages well above underlying productivity growth. The NIRA covered over 500 industries, ranging from autos and steel, to ladies hosiery and poultry production. Each industry created a code of "fair competition" which spelled out what producers could and could not do, and which were designed to eliminate "excessive competition" that FDR believed to be the source of the Depression.

These codes distorted the economy by artificially raising wages and prices, restricting output, and reducing productive capacity by placing quotas on industry investment in new plants and equipment. Following government approval of each industry code, industry prices and wages increased substantially, while prices and wages in sectors that weren't covered by the NIRA, such as agriculture, did not. We have calculated that manufacturing wages were as much as 25% above the level that would have prevailed without the New Deal. And while the artificially high wages created by the NIRA benefited the few that were fortunate to have a job in those industries, they significantly depressed production and employment, as the growth in wage costs far exceeded productivity growth.

These policies continued even after the NIRA was declared unconstitutional in 1935. There was no antitrust activity after the NIRA, despite overwhelming FTC evidence of price-fixing and production limits in many industries, and the National Labor Relations Act of 1935 gave unions substantial collective-bargaining power. While not permitted under federal law, the sit-down strike, in which workers were occupied factories and shut down production, was tolerated by governors in a number of states and was used with great success against major employers, including General Motors in 1937.

The downturn of 1937-38 was preceded by large wage hikes that pushed wages well above their NIRA levels, following the Supreme Court's 1937 decision that upheld the constitutionality of the National Labor Relations Act. These wage hikes led to further job loss, particularly in manufacturing. The "recession in a depression" thus was not the result of a reversal of New Deal policies, as argued by some, but rather a deepening of New Deal polices that raised wages even further above their competitive levels, and which further prevented the normal forces of supply and demand from restoring full employment. Our research indicates that New Deal labor and industrial policies prolonged the Depression by seven years.

By the late 1930s, New Deal policies did begin to reverse, which coincided with the beginning of the recovery. In a 1938 speech, FDR acknowledged that the American economy had become a "concealed cartel system like Europe," which led the Justice Department to reinitiate antitrust prosecution. And union bargaining power was significantly reduced, first by the Supreme Court's ruling that the sit-down strike was illegal, and further reduced during World War II by the National War Labor Board (NWLB), in which large union wage settlements were limited by the NWLB to cost-of-living increases. The wartime economic boom reflected not only the enormous resource drain of military spending, but also the erosion of New Deal labor and industrial policies.

By 1947, through a combination of NWLB wage restrictions and rapid productivity growth, we have calculated that the large gap between manufacturing wages and productivity that emerged during the New Deal had nearly been eliminated. And since that time, wages have never approached the severely distorted levels that prevailed under the New Deal, nor has the country suffered from such abysmally low employment.

The main lesson we have learned from the New Deal is that wholesale government intervention can -- and does -- deliver the most unintended of consequences. This was true in the 1930s, when artificially high wages and prices kept us depressed for more than a decade, it was true in the 1970s when price controls were used to combat inflation but just produced shortages. It is true today, when poorly designed regulation produced a banking system that took on too much risk.

President Barack Obama and Congress have a great opportunity to produce reforms that do return Americans to work, and that provide a foundation for sustained long-run economic growth and the opportunity for all Americans to succeed. These reforms should include very specific plans that update banking regulations and address a manufacturing sector in which several large industries -- including autos and steel -- are no longer internationally competitive. Tax reform that broadens rather than narrows the tax base and that increases incentives to work, save and invest is also needed. We must also confront an educational system that fails many of its constituents. A large fiscal stimulus plan that doesn't directly address the specific impediments that our economy faces is unlikely to achieve either the country's short-term or long-term goals.

Mr. Cole is professor of economics at the University of Pennsylvania. Mr. Ohanian is professor of economics and director of the Ettinger Family Program in Macroeconomic Research at UCLA.

[Glenn]

The new equilibrium is forthcoming, and may define an entirely new business paradigm.

Bill, The only person I know who is more eternally optimistic then you is Dave.

As the cost of living goes up in both China and India, then many outsourced jobs will make their way back. I already see that in the software industry. Good software requires good quality control, and that isn't easy without constant communication in-between builder and internal/external customer.

And companies are talking about reigning in their outsourced labor.

I assume you mean "offshore" jobs and labor with these. Outsourced jobs can still be onshore, for example if a company eliminates its custodial department in favor of using a separate custodial company in town. Offshore workers on the other hand might not be outsourced workers (although most are), they can be employees of a division the company maintains in another country (my company has one of these in Ireland for example).

As far as offshoring goes, I'm seeing the opposite in my company and other financial institutions from what you describe. They are actively ramping up the offshoring of existing positions to try to cut costs quickly. There is absolutely no discussion of bringing any jobs back onshore, they all feel (or at least argue) that they are lagging behind the competition in offshoring and need to catch up to remain competitive. It's all based on Return on Investment (ROI), and they say the ROI will only increase if they offshore more.

Note too that increasing on-shore jobs does not automatically mean increased job opportunities for U.S. citizens. Take for example Bill Gates plea to Congress last year to allow more visa workers into the country because there is a shortage of skilled American workers. Of course the fact that the visa workers come cheaper was not a factor in his request

I note with interest how many Mexicans in this area are going back home because the jobs have dried up.

Well sure, that's where the jobs are now! They can work in the U.S. companies' customer-service departments that are based down there.

Sadly my jest is actually not far off. My manager is a citizen of India living in Chicago. He just headed out last week for a three week trip to visit family in India, and before he left he commented that he wished we had some word on layoffs before he was leaving so he would know if he should just stay in India or not, since that is where many of the jobs are going.

I don't see this as a positive for U.S. labor!

[Bill Glasheen]

The new equilibrium is forthcoming, and may define an entirely new business paradigm.

Bill, The only person I know who is more eternally optimistic then you is Dave.

Guilty as charged! But you know... often I'm right.

I saw us get through quite a bit in my life. And in this situation, I understand the interdependence of economies. The world needs our economy to do well, and vice versa. This is the beauty of free trade. It works as well as - if not better than - diplomacy. The only thing you need to do to excel in this game is work harder/better/smarter than the next guy.

Speaking of the above subject...

- Bill

[Glenn]

I note with interest how many Mexicans in this area are going back home because the jobs have dried up.

CNN has an article out today addressing this, Bad economy forcing immigrants to reconsider U.S.. It highlights that while some are leaving there is incentive for most to stay, so it is not thought that the return migration is likely to be a major trend.

Bad economy forcing immigrants to reconsider U.S.
By Thelma Gutierrez and Wayne Drash
CNN
LOS ANGELES, California (CNN) -- Pedro Pablo slowly folds up his American flag blanket and stuffs it in his duffel bag. With it goes his American dream.

"I left my family and lost four years with them. I will ask them to forgive me," he said.

Pablo is an illegal immigrant from Guatemala who came to the United States to support his wife and five sons back home. When he arrived, construction jobs were plentiful. Over the last year, he says, he's worked three days.

He recently boarded a bus with a one-way ticket home, paid for by the Guatemalan consulate in Los Angeles. "I thought I could get ahead here. I regret coming."

Across the United States, tens of thousands of immigrants -- those here legally and illegally -- are facing a similar dilemma: Do they continue to search for jobs in a struggling U.S. economy or return home to an even bleaker economic situation?

"Things are very dire, and I think it's impacting those at the very bottom even more so," said Abel Valenzuela, a professor at the University of California-Los Angeles who has spent years studying day laborers.

"Day laborers are being really, really impacted."

America's economic boom during the 1990s and 2000s created a high demand of day workers needed for anything from building homes to picking fruit and from working at slaughterhouses to working as nannies. Many of those jobs have since evaporated, resulting in more and more people -- immigrants and native-born Americans -- flooding day labor job sites and standing on street corners in search of any type of work they can get.

"All of them are competing for the few jobs being dispatched," Valenzuela said.

Immigration experts say it's not yet clear how large an immigration exodus of Latin Americans is under way. But they say anecdotal evidence suggests day laborers, like Pablo, have begun packing -- a result of the economy and tougher immigration enforcement.

For some immigrants, the experts say, the reasons for toughing out the U.S. economic recession outweigh the reasons for leaving, including:
• One or two days of work per month at $8 an hour is often better than what they can make back home;
• Tougher border enforcement along the U.S.-Mexico border has made it harder for them to return once they leave;
• Smuggling costs to get into the United States from Mexico have skyrocketed from about $1,500 three years ago to about $6,000 today.

"I'm not convinced it's a tidal wave of exodus," Valenzuela said. "There really is a fear mentality [of leaving], and as a result many immigrants are buckling down -- that is they're hiding or living in the shadows of our law. So they think more than twice about whether or not they want to go back to their country of origin, because they know very well that it's going to be extremely difficult and very expensive to come back if they want to pursue their dream."

Steven Camarota with the Center for Immigration Studies, a Washington-based think tank that seeks a "pro-immigrant, low-immigration vision," said Census data indicate that more than 1 million illegal immigrants left last year, a departure that began even before the nation's economy took a turn for the worse toward the end of the year.

He said better border enforcement and workplace raids on illegal immigrants "let people know that the immigration law was back in business."

With illegal immigrants returning home, he said, "It's certainly good for two groups: taxpayers and less educated natives."

The lack of work in the United States has had a trickle down effect in the immigrants' countries of origin. The money sent back home by Mexican immigrants in 2008 fell for the first time since record-keeping began 13 years ago.

The remittances dipped 3.6 percent, from $26 billion in 2007 to $25 billion, according to Mexico's central bank. Remittances are Mexico's second-largest source of foreign income, behind only oil. Other Latin American countries also have seen money sent from immigrants in the United States slow.

Erik Camayd-Freixas, a professor at Florida International University who has served as an immigration court interpreter for two decades, recently traveled to Guatemala, where he saw the effects of less money being sent home by immigrants.

"Everybody was talking about it," he said. "The local economies are severely impacted and the unemployment is rampant."

He said scores of people deported from the United States are trying to find any type of job in Guatemala. "They've been there six months and they have no work," Camayd-Freixas said.

That's why he said he believes most immigrants already in the United States are willing to stick it out, despite the hard-scrabble times in America.

"The truth of the matter is, despite our 7.6 percent unemployment, most Americans are not going to do those jobs that migrant workers do," Camayd-Freixas said. "They're certainly not going to pick tomatoes, grapefruits and oranges."

Camarota disagrees. He said Americans most likely to compete for day labor jobs -- those with a high school degree or less -- are currently unemployed at an astounding rate of about 15 percent. "It's very hard to argue that we're desperately short of unskilled workers," he said.

Jeronimo Salguero is the director of a day labor site in Los Angeles. He says employment for day laborers has dipped 75 percent over the last year. He said on any given day three years ago, his center found work for nearly 50 percent of the people who gathered there. Now, that figure is about 5 percent of the 250 men who huddle daily searching for work.

A study issued in January by the Pew Hispanic Center found that nearly three of four Latinos surveyed said their personal finances were in fair or poor shape, compared to 61 percent of the general U.S. population. Among Hispanic immigrants who sent remittances home over the last two years, about 70 percent said they sent less in 2008 than in 2007.

Salguero said to help offset the hard times, immigrants are crowding about 20 men into apartments. He's now working with the Guatemalan consulate. Once a week, he said, the consulate purchases a bus ticket for an immigrant to go home.

"They are completely desperate," he said. "Each day, I have workers coming into the office and say, 'Geronimo, help me. I want to go back to my country.' "

Pablo was one of those men. He had lived in a one-bedroom apartment with seven other men. His "bedroom" was a corner of the living room where he kept his blanket, duffel bag and picture of his family.

"I can't make it here," he said. "If I have to suffer, it's better to suffer in Guatemala with my family."

[Glenn]

What do y'all think of this statement:

"The truth of the matter is, despite our 7.6 percent unemployment, most Americans are not going to do those jobs that migrant workers do," Camayd-Freixas said. "They're certainly not going to pick tomatoes, grapefruits and oranges."

I heard essentially the exact same thing about six years ago from the VP in charge of technology in my company, as an explanation for the start of offshoring of IT jobs to Ireland and India: 'I can't get American programmers to program in FORTRAN or COBOL on legacy systems, they won't do it, so I have to go to programmers in Ireland and India'. Needless to say, offshoring did not end with FORTRAN and COBOL programming needs. The current plan to offshore 30% of the company's remaining on-shore jobs over the next two years certainly has nothing to do with programming languages. I didn't buy into that explanation then, and I still don't now.

Camarota disagrees. He said Americans most likely to compete for day labor jobs -- those with a high school degree or less -- are currently unemployed at an astounding rate of about 15 percent. "It's very hard to argue that we're desperately short of unskilled workers," he said.

[Bill Glasheen]

Glenn

For the right price, I'll program in FORTRAN. If I lose my job - and that could happen - my price would go down.

Most of my analysis software for my dissertation was in that language. The rest was either in DEC assembly language (for my data acquisition computer), or script designed to run my FORTRAN programs.

It is true that it was tough finding COBOL programmers just before Y2K. There were in fact Dilbert cartoons about hiring anyone who could pronounce the word. But those days are over.

The truth is, no job is safe now. None.

I partially blame academia for ignoring the legacy needs of industry. A good programmer should be multilingual. I'm primarily a researcher and just enough of a programmer to get my work done. If I can do it...

Bill

P.S. These days, I'm a hack at SAS. It's what I use to program the prototypes for our health care risk models.

[Glenn]

I've only used SAS once, everywhere I've been that uses statistical software has used SPSS. Now I use GIS packages like ArcGIS, which have statistics routines built in.

[Jason Rees]

Bill, thanks for sharing your thoughts on this.

Things are kinda crazy around here, which is why it's taken me so long to reply. We've gone to 24-hour shifts, and I'm studying for a big promotion test.

I don't share my friend's ire for NAFTA, but everywhere I look it seems we're getting shafted by countries we keep favoring. China seems to be the biggest example that comes to mind. Most-Favored-Nation-Status? Ugh. And what do we do about it? The usual: nothing.

I do think the entire loan process and everything that deals with it needs to get an overhaul.

All we can do in a "free" society is make it possible to be rewarded for working hard and living within your means. Beyond that, it's up to the individual to make it - or not.

Is it? Cause it seems to me that the government's bailing out all those individuals who did not 'make it.'

But I'm not so sure that prosecution and more laws are going to solve all the problems.

I'm the last person to propose more laws be added to the books. But re-writes? Absolutely. Toss the crap and start over. Big things happen when people scrap everything and take a few good examples, and do everything they can to make it better. Think big and do better.

Instead our government seems to be cherry-picking the worst of the past and present. This 'stimulus' is a joke, and we're all going to be the punchline. The Dems haven't even been in power two months, and their first major act is to fund half their wildest dreams at once.

Doubling the national debt in one year? It can still happen.