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27 July 2016

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elkern

US (Fed) Govt can make a difference in the job market everywhere. Mfg is unlikely to be a big labor market, but there are plenty of other things we need to do.

Republican Congress has INTENTIONALLY stifled the US economy since Obama was elected because they know that Keynesianism works, but it should only be used when a Republican is President.

New Tech (and management techniques) increase efficiency. So, either we find more things that WE want to have done, and tax the rich to do it, or WE let a lot of people go hungry (or at least waste their lives).

turcopolier

elkern

The decline of Baltimore began long before Obama was elected. pl

Tyler

Maybe Peter Angelos running up BS asbestos suits against Bethlehem Steel and putting the shipyard out of business has something to do with it?

Always YT's fault somehow.

Tyler

Peak Leftism in my lifetime. Whodathunk it?

Jim

I thought the comments of David Simon were really interesting as a further explication of Col Lang's points. He's was a crime beat reporter in Baltimore for a number of years before turning his hand to the roman a clef that was "The Wire" (highly recommended BTW).

I took his main point to be that the drug war and the political desire for action put pressure on the police to crack down extremely hard on civil liberties - it's hard to call it a War on Drugs without inflicting civilian casualties. But one insight was that having black cops actually increased the level of police brutality because white cops would otherwise "hold back" for fear of being labelled racist. Instead, this became much more about class and control than a racial divide between cops and citizens.

The loss of the manufacturing base and the ability to be gainfully employed without a lot of higher education is clearly part of the problem, but his comments on policing were something I hadn't heard of before. Worth the read:

https://www.themarshallproject.org/2015/04/29/david-simon-on-baltimore-s-anguish

Altoid

Couldn't agree more. It's actually close to a point I've been trying to push on a few economics blogs for years now-- that the central and most urgent question for political economy going forward is, and for quite a while looking backward has been, this: how will people of ordinary motivation, gifts, and attainments be able to earn a decent and legal living? Ensuring a real and satisfactory answer to that question is one of the really core responsibilities of a system of political economy, imho.

This is a systemic and national problem at the least, as you say. And it's at its worst in rust-belt cities, where until as recently as 40 (or even 30 in some cases) years ago there was urban-based manufacturing that needed a lot of unskilled and semi-skilled laborers and filled a lot of those jobs with local people who could get to work affordably on urban mass transit.

For old and dense urban areas like Baltimore and Philadelphia the catastrophe actually started by the early 60s, when the jobs began to move out to greenfield factories and suburban malls and offices. Then, in moves that have been more widely remarked on, the manufacturing and associated jobs went to the South, then to Mexican maquiladoras, then to east and south Asia. Federal and state and local policies greased much of this displacement and continue to. Even if the factories came back, though, contemporary manufacturing methods also continually reduce the workers needed at all skill levels. Which might be a theoretically good thing, except that the way things are now, people need gainful legal employment. And very few out there are driven, educated, articulate, entrepreneuerial, able to pay for the privilege of preparing themselves exactly as employers want them to be, etc.

Maybe a difference between now and 1968-- big parts of Baltimore still haven't been touched, really, since the MLK riots of that year after which almost anybody with money left most parts of the city-- is that the current job decline trend is affecting a demographic that politicians know they should care about. Unfortunately that doesn't necessarily mean anything real will get done . . .

confusedponderer

"Maybe Peter Angelos running up BS asbestos suits against Bethlehem Steel and putting the shipyard out of business has something to do with it? Always YT's fault somehow."

Tyler,
I think you largely miss the point:

* What you witness in these asbestos lawsuits against Bethlehem Steel is that the US leaves an employees by and large standing in the rain over work related injuries, illness or disabilities.

I assume for the sake of argument that the people you refer to in all likelihood these do have work related injuries (because if that was not the case you'd accuse them of faking it, and you wouldn't do that, would you).

Think of the New York cops and firefighters who were exposed to all that noxious dirt after 9/11, and literally sacrificed their health in service - how is it that they had to fight for compensation for year? How is it?

The apparent lack of satisfactory mechanisms to settle such issues compels people who have been hurt to use the tools at their disposal to compenstate them for work related injury - and that is for good or ill the US civil law system.

It is unfortunate for corporations in the US facing such lawsuits that there is the instrument of punitive damage, which can amount to iirc up to 20x the damage caused (last I looked), if the jury feels the culprit has been a real asshole. That is, I hurt you, and your medical bills amount to $ 1.000. The jury thinks I was a real asshole about it and makes it $ 20.000, just to teach me and comfort you. It's a little like a lottery.

The problems here are (a) the punitive damage and that damages are not capped to the amount of damages actually caused. The second problem is (b) the quota litis, that allows an atorney to work for free but take up to a third (or is it even more now?) of the damages secured - which (c) give an incentive to file high and try to prove asshole-ish conduct. In any case - an employee who sues his employer is very likely put out of his job, leaving him with two problems: No income and his ailment.

This "asshole bonus" is what makes compensations lawsuits so unpredictable for companies and insurances and so lucratice for lawyers. Enthusiasts for punitive damages tend to point out that punitive damages because of their unpredictability are an effective deterrent for misconduct of any kind. In fact, that deterrent was so effective that it deterred Cessna right out of the light aircraft business.

* Maybe a more reasonable aproach to litigation over work-related injuries and ailments would have prevented such lawsuits from allegedly wrecking companies (leaving aside that the demise of the rust belt was probably not entirely due to work related lawsuits - companies not modernising plants for decades but 'milking them', not to mention that globalisation thing that may have played a role after all)? Just asking.

* Here's in brief how it works in Germany:

First, in Germany compensation is limited to the amount of damages actually caused. I hurt you for $ 1.000 - you get $ 1.000 - not more. Punishment is left to administrative and criminal courts. It has no place in civil proceedings. Also, the quota litis is considered unethical and attorneys are prohibited from working on that basis. In non work-related cases of injuries, there are compensation tables which are periodically readjusted by judges based on current developments for treatment costs.

Secondly, and more specifically, in Germany work-related injuries and disabilities are handled through and paid for by 'Berufsgenossenschaften'. The 'Berufsgenossenschaften' create mandatory safety-in-the-workplace regulations and inspect for compliance. Membership is compulsory for corporations, as is compliance with safety-in-the-workplace regulation. In the US conservatives call that "red tape".

Job related injuries must be reported to the 'Berufsgenossenschaften' by the company. The various 'Berufsgenossenschaften' cooperate and have clinics specialising in job related injuries, and generally an excellent level of quality, equipment and competence. The idea is to get an employee back to health, and to work, quickly.

In case of a work related injury, the employer reports the case to the 'Berufsgenossenschaften'. They pay for treatment with their specialised doctors. After treatment the employee returns to work, or, if he is unable to, receives disability compensation. If the injury was the result of non-compliance with safety regulations the 'Berufsgenossenschaften' will iirc charge the treatment costs on the employer, and fine him for non-compliance. The eployee is out of that angle entirely.

Now before you cry socialism and big government - for just a second consider the very practical benefits:

We do not expose our corporations to risks like punitive damages over work related injuries. We do not compel employees into (year long) lawsuits (of financial and psychological attrition) against employers (with far deeper pockets) to seek regress. Also we avoid destroying the relationship between employee and employer. The employer does not face unpredictable risks of litigation (driving down costs for insurances). And we do not leave the injured emplyoee standing in the rain. We have that system ever since Bismarck.

* The nature of the US legal system is a *choice* and the result of letting it grow that way. To not do something about its defects or excesses is also a choice the US as a nation makes for their legal system.

To blame greedy plaintiffs and their greedy lawyers for allegedly driving companies into ruin with stuff like asbestos lawsuits is preposterous. What else are they supposed to do? Stay at home sick, out of a job, and suck it up?

HankP

Col. Lang -

I think there are things that can be done. Whether they will get done is questionable.

Our country has serious deficiencies in our public infrastructure, problems that will have to be addressed sooner or later. It would be a large public works project, and would at least offer a several year boost for construction work.

Long term, de-industrialization is a major issue that I don't see anyone addressing. Or I should say, I see plenty of people addressing it by moving to the service sector, but no kind of large scale thinking for how it will affect our society. In a decade or so we may be at the point where only 50% employment is necessary to provide all production and services for the economy - what about the other 50%?

jerseycityjoan

Jobs are disappearing all over the First World due to advancements in technology. More and better robots are popping up all over the place. Some of the jobs the robots take over are a blessing due to their strenuous and dangerous nature.

But where are the tens of millions of new, good paying full time jobs we need to have in the private sector in America?

They are not here. They are not coming, not in the required numbers. Instead of dealing with this head-on, the people in charge have decided to ignore the signs that a job crisis is building.

Cee

All,

Corporations should be rewarded for opening business in the inner city and rural areas and be penalized for moving production offshore. No tax breaks and the import fees for the slave wage products should be astronomical for those who do. They should also no longer we able to claim status as a US company. Wal-Mart ( proud to say that I never darkened their doorway) is now closing several large stores after destroying all of the former competition and moving to China!
Protectionism? Damn right.

confusedponderer

jerseycityjoan said:
"Jobs are disappearing all over the First World due to advancements in technology. More and better robots are popping up all over the place."

Iirc around Christmas last year there was an odd and thus memorable nationwide ad campaign by BMW, which at the time were rolling out their new composite hybrid. The ad had the theme, roughly summed up as, "the robot - your fried".

Someone on the web had the good sense to take a picture. Translation:

"Why we use robots?
Because it has no consequences (for your health).
Innovative production without physical strain.
For us, the next step."

http://tinyurl.com/ocj9akg

And what's the step after that?

http://www.bmwgroup.com/com/de/verantwortung/whats_next/roboter/index.html

"Collaborative work (with robots) - work healthier with less strain"

Brave new world indeed.

William R. Cumming

Perhaps former Baltimore Mayor and Governor should be asked on his role in shaping modern Baltimore? Does he have the same vision for the entire USA?

As to black leadership from elected politicians--not much in my opinion but perhaps more than many white politicians.

The political class in the USA deeply corrupt and all about incumbency and manipulating their elective positions to self-deal benefits for friends and family while in office and afterwards.

Richard Sale

An excellent point! No one has said this so far.

Richard Sale

Babak Makkinejad

There was an enterprise zone during Mr. Clinton's presidency in Detroit - funded by the largess of US government - and failed due to the endemic corruption, venality, and incompetence of the City of Detroit's publicly elected officials - a city controlled for decades by African-Americans.

Detroit suffered the same fate that many newly independent 3rd World countries did when the Europeans left the scene; in Nigeria, in Zimbabwe, in Ghana, in Uganda - to name a few.

These are self-inflicted wounds and one cannot blame others - in my opinion.

Babak Makkinejad

This is a spurious argument; would you have road and construction heavy machinery banned as well?

Lots of people could be employed digging ditches and building berms and wells and walls.

Or would you make container ships illegal as well?

Then many more could be employed as stevedors..

Babak Makkinejad

I think if you consider the wider context of the American continent; you would notice that countries with heterogeneous population on this continent, on the average, are much more violent than the European and Asian states:

Mexico, Guatemala, Brazil, Colombia, Venezuela, United States, Honduras, and Panama and others.

The violence is not due to the loss of manufacturing jobs; something other is causing it.

nick b

Altoid,

All I would add to what you have said are Baltimore specific situations that made the problem worse there. Baltimore always had a large industrial base, but those companies were never headquartered in Baltimore. When foreign competition and the recessions of the 70s and 80s caused plant closings it was easier for companies to do it in Baltimore where they were not as deeply involved in the community as in their home cities. This was multiplied by the end of large scale Federal assistance and programs to urban areas that began in the 70s and accelerated through the Reagan era. Baltimore revitalized itself to an extent in the 80s by shifting its economy to tourism (inner harbor, etc). But those jobs could never pay as well as the union jobs of the old industrial economy. Additionally, the money of the tourist trade: hotels, mall stores, etc. did not necessarily stay in Baltimore. Combine this with higher wage earners leaving the city proper to live in the counties and commute, and the drain in capital and in interest in the welfare of the city and its residents outside of the shiny business and tourist areas created the somewhat intractable problems we see today in Baltimore. The riots in Baltimore should not be a surprise, the surprise is that it hadn't happened sooner.

SteveG

Cee
Jack Kemp proposed this idea in the
70's I believe and called it "enterprise
zones". Reagan and other pols made
the pilgrimage to the Bronx and Harlem
to emphasize this. Nothing was ever done.
Off shoring was easier. Agree on the taxation
issue. Obama was going to rectify this as
part of his Hope and Change. Neither.

Matthew

Col: "IMO the root cause of this catastrophe in the life of the City of Baltimore is a lack of available jobs that are accessible to entry level men who are not well qualified for jobs that require education and self discipline in a changing economy."

So true. Failure then reinforces failure. When the only shiny new building in your part of town is the jail, the problem's a lot bigger than the police.

ex-PFC Chuck

William C: Interesting you should mention O'Malley's role. Yesterday I ran across a fascinating piece by a former crime beat reporter for the Baltimore Sun, David Simon, who lays a considerable amount of the blame for the city's police department dysfunction precisely at the former mayor's feet. He argues that actions O'Malley took in order to buff his image in preparation for ascending the political ladder undermined the integrity of the department. Regarding the race issue within the department, he asserts that in his experience the officers who treated black detainees most brutally were almost all African American themselves. Here's a quote:

"When Ed and I reported “The Corner,” it became clear that the most brutal cops in our sector of the Western District were black. The guys who would really kick your ass without thinking twice were black officers. If I had to guess and put a name on it, I’d say that at some point, the drug war was as much a function of class and social control as it was of racism. I think the two agendas are inextricably linked, and where one picks up and the other ends is hard to say. But when you have African-American officers beating the dog-piss out of people they’re supposed to be policing, and there isn't a white guy in the equation on a street level, it's pretty remarkable. But in some ways they were empowered. Back then, even before the advent of cell phones and digital cameras — which have been transforming in terms of documenting police violence — back then, you were much more vulnerable if you were white and you wanted to wail on somebody. You take out your nightstick and you’re white and you start hitting somebody, it has a completely different dynamic than if you were a black officer. It was simply safer to be brutal if you were black, and I didn't know quite what to do with that fact other than report it. It was as disturbing a dynamic as I could imagine. Something had been removed from the equation that gave white officers — however brutal they wanted to be, or however brutal they thought the moment required — it gave them pause before pulling out a nightstick and going at it. Some African American officers seemed to feel no such pause".

https://www.themarshallproject.org/2015/04/29/david-simon-on-baltimore-s-anguish?utm_medium=social&utm_campaign=share-tools&utm_source=twitter&utm_content=post-top

elkern

Of course ("decline of Baltimore began long" ago). Baltimore is the south-east corner of the Rust Belt; a midling Port city, from which we once shipped manufactured goods all over the world. Unionized factory jobs were the gateway to the middle class for millions of Americans - particularly "hyphenated" Americans, including Blacks.

That's gone, and it ain't comin' back. But that's not the only way to have a strong middle class.

My point is more short-term: that Republican obstruction prevented the US Gov't from using Fiscal policy to restart our economy after the crash of 2008. If we had borrowed $1T, at basically 0% interest, and invested it in infrastructure, we'd be in much better shape now:

- better roads, bridges, rails, & internet would make everything better, faster, and cheaper.
- millions of young people would have gotten job experience in the prime of their lives, rather than sitting in their parents basements, wiggling their thumbs.
- spreading the money around makes things better for everybody, except the .1% for whom "better" means "more better than everybody else". Middle class people buy things & services from other people, spreading it around (here) even more.

I'm not justifying the stupidity & immaturity of smash-&-grab rioters. But the INTENTIONALLY SUPPRESSED Job market makes hard work a hard sell. Things have been getting worse & worse for the working poor (of all "races", etc). A better economy wouldn't fix all the problems of the ghetto, but it sure would help.

Will Reks

http://www.washingtonpost.com/local/freddie-grays-life-a-study-in-the-sad-effects-of-lead-paint-on-poor-blacks/2015/04/29/0be898e6-eea8-11e4-8abc-d6aa3bad79dd_story.html

There's a theory going around that spikes in violent crime in previous decades were due in large part to lead poisoning.

Charles I

yes labor has manifestly manged to seize control of capital, whodathunkit indeed.

turcopolier

All

http://en.wikipedia.org/wiki/Baltimore

"Once a predominantly industrial town, with an economic base focused on steel processing, shipping, auto manufacturing, and transportation, the city experienced deindustrialization which cost residents tens of thousands of low-skill, high-wage jobs.[133] The city now relies on a low-wage service economy, which accounts for 90% of jobs in the city.[134][135]" wiki pl

confusedponderer

Babak,
of course it is spurious, that is the very point. For the corporation, the emphasis is quite naturally cheaper, faster and more accurate production. The health aspects are just the selling point.

The campaign suggests to me that BMW is acutely aware of potential buyer rejection of robotically built cars. That was what made the campaign so remarkable.

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