Friday, June 16, 2017

Potpourri (TL;DR edition)

Are things Too Long for you?  So long you Don't Read them?  Don't worry, I'm on the case!

Today I provide a variety of links to valuable/interesting reading, along with brief summaries for those of you movers and shakers on the go who don't have the time to read them yourselves.  Graphically, I have provided no-usage-rights-required pictures of lovely flowers.  Soothing!

You'll often hear assorted Important People assert that high unemployment is due to a "skills gap"; workers formerly employed in manufacturing, for instance, lack the skills to move swiftly into new work, even though businesses are eager to hire.  The problem is there's very little evidence for this assertion at all.  Lost manufacturing jobs, which once provided a middle-class way of life, are being replaced by low-end, undesirable work -- working as a cashier, for instance -- or high-end work, requiring collegiate education and beyond.  I guess you could say that's evidence of a "skills gap," but it's a gap that can't be breached with simple job retraining, and besides, there's only so many of those high-end jobs to go around.  Apprenticeship programs can help mitigate "skills gap" problems somewhat, but the bottom line is: middle class jobs are disappearing, period, and "skills" don't have a lot to do with that.  (Low aggregate demand and "labor arbitrage" have more to do with it - see below).

I talked a week ago about infrastructure and how public-private partnerships are a bit of a scam.  Here's more writing to that effect.  China: doing it right, at least until recently.  India and much of the rest of the world: not so much.  Trump's infrastructure plan relies heavily on public-private partnerships.  Make America Stricken with Delays and Cost Overruns Again.

OPEC has no answer to North American shale producers and everyone involved has a short-term incentive to produce more, even if in the long-term that is bad for business.  As such oil is going to stay very cheap for a long time, which is good in the short term for consumers, and bad in the long term in terms of replacing oil with an environmentally less destructive energy source.

A fascinating but lengthy and verbose article, which I strongly encourage you to read if you have the patience for it, that looks at the history (from roughly the industrial era forward) of class development, immigration, "free trade" and the rise of "populism" in response thereto. 

In a nutshell: nation-states developed via mercantilism, capital and labor clashed constantly, eventually capital more or less pacified labor by improving their position in the social contract, and a new "class" emerged - the "managerial class," which is basically a less nasty, more soothing capitalist class.  As a side note, the higher labor standard under this regime essentially requiring limiting immigration, as the resources of the nation-state or "core area" are not limitless and, given that low-wage immigration or outsourcing can be used to diminish the earnings of labor, it is requisite that both be curtailed to keep the good times rollin'.

However, with the advent of the super-national, global corporation, the capitalist class has every incentive to dismantle mercantilism (an obstacle to the global logistics chain) and reduce labor to relative poverty again by pitting "native" workers against immigratns and workers overseas who earn far less and have far fewer rights ("labor arbitrage").  Labor, in response, has every reason to turn to populists - some of whom are legit, others of whom are con artists - to restore the old mercantilist order.

(It goes without saying that if labor could somehow achieve global solidarity, there would be no need to return to the mercantilist order, but then again, the Jets could win the Superbowl this year.  Most likely not gonna happen.)

If you have the time, read the article.  Long, but worth it.

In a nutshell: Democrats worry that "populist" voters hate "big government".  Well, there's two conceptually easy (but politically difficult) ways to win over these voters without increasing the size of government: (1) negotiate the value of the dollar downstairs relative to our trading partners, notably China, thus driving exports and subsequently raising manufacturing employment; and (2) replace members of the Fed who are fixated on crushing inflation -- inflation which barely exists -- by raising interest rates, which slow down the economy and make hiring and salary increases less likely.  It seems to me that virtually everyone except Neel Kashkari of the Minnesota Fed should be on the potential chopping block.

Incidentally, here's a 5-paragraph piece on Neel Kashkari.  (Bloomberg)  He's a smart guy.  Read it!

And let's wrap up with this nice, short and informative piece.  TL;DR version: Crown Prince Sheikh Hamad bin Khalifa al-Thani of Qatar grew up with a chip on his shoulder regarding his powerful neighbor, Saudi Arabia, and spent decades on end messing with the Saudis all over the globe.  Saudi Arabia is trying to put an end to that nonsense right now with a heavy hand, but the heavy hand can seriously backfire!  Not smooth, Saudis!  This approach might work out for Saudi Arabia, or we might be looking at a Qatar more closely allied with Iran (and Turkey, to an extent) than ever.  We'll see how it turns out!

Have a great weekend, everyone.

Not pictured: private contractors scamming taxpayers on overly-bloated P3 infrastructure projects.

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