Happy Irony Day

by bdunn on September 1, 2014

in Be Afraid, Business, Corporate, Economics

Thirty-five years ago I was a newspaper reporter covering events surrounding the United Steelworkers Union and the American steel industry in Wheeling, W.Va. and Pittsburgh. Steelworkers had physically demanding, dangerous jobs, but their union was powerful and extracted (especially in today’s terms) very attractive wages and benefits for its member-employees.

But, in my opinion, looking back at what happened in the early 1980s, the membership became too powerful and too greedy, and demanded ever more money each time an employment contract ran out. This culminated in, among other things, the bankruptcy of Wheeling-Pittsburgh Steel in 1985 and the subsequent loss of probably about 8,500 high-paying union jobs in the Wheeling area alone.

This was an era that marked the high point in union membership nationally, which rose over the decades in large part because of excesses elsewhere in the Ohio River Valley, carried out near the beginning of the 20th Century by Consolidated and other giant coal-mining companies against their own employees. Workers were forced to live in bare-bones houses in “company towns,” and were paid in “company script” instead of dollars, which could only be spent in company stores that charged inflated prices for basic goods.

It’s no wonder that humans rebelled and eventually formed unions for protection against such corporate excess, just as it’s no wonder that major heavy industries fell apart in the face of such inflexible union demands in the 1980s.

The pendulum of excess swings only so far one way, then eventually swings back. And apparently, now, we’re back at the other end of the spectrum again, only corporate excess has taken on a different form.

Union membership has declined by millions since the ’80s, mostly concentrated now among public government employees and teachers, whose right to organize is even now being whittled away in states such as Wisconsin. American corporations long ago moved most of their heavy manufacturing operations off-shore to escape the unions and drastically lower their cost of employment. As a result, today’s American workforce is concentrated much more in service industries and secretarial and lower-management-level white-collar corporate occupations.

On the corporate finance side, here’s a condenced look at the last 30 years of history, according to economist William Lazonick, writing in the Harvard Business Review:

In the early 1980s permanent plant closings were triggered by the inroads superior Japanese manufacturers had made in consumer-durable and capital-goods industries. In the early 1990s one-company careers fell by the wayside in the IT sector because the open-systems architecture of the microelectronics revolution devalued the skills of older employees versed in proprietary technologies. And in the early 2000s the offshoring of more-routine tasks, such as writing unsophisticated software and manning customer call centers, sped up as a capable labor force emerged in low-wage developing economies and communications costs plunged, allowing U.S. companies to focus their domestic employees on higher-value-added work.

These practices chipped away at the loyalty and dampened the spending power of American workers, and often gave away key competitive capabilities of U.S. companies. Attracted by the quick financial gains they produced, many executives ignored the long-term effects and kept pursuing them well past the time they could be justified.

A turning point was the wave of hostile takeovers that swept the country in the 1980s. Corporate raiders often claimed that the complacent leaders of the targeted companies were failing to maximize returns to shareholders. That criticism prompted boards of directors to try to align the interests of management and shareholders by making stock-based pay a much bigger component of executive compensation.

Given incentives to maximize shareholder value and meet Wall Street’s expectations for ever higher quarterly EPS, top executives turned to massive stock repurchases, which helped them “manage” stock prices. The result: Trillions of dollars that could have been spent on innovation and job creation in the U.S. economy over the past three decades have instead been used to buy back shares for what is effectively stock-price manipulation.

Here’s what Lazonick’s rearch has revealed: Of those companies making up the S&P 500, 449 have been listed on public stock exchanges from 2003 through 2012. During those years the board members of those 449 companies voted to use 54% of corporate earnings to buy back their own stock, almost always on the open market. Those same companies spent another 37% of their earnings paying dividends on stock shares.

So you have America’s major corporations spending more than 90% of their profits on their own stock, leaving less than 10% of their profits for minor things such as research and development, technology investment, facility expansion or employee pay increases.

Why would these board directors take such action? “In 2012 the 500 highest-paid executives named in proxy statements of U.S. public companies received, on average, $30.3 million each; 42% of their compensation came from stock options and 41% from stock awards. By increasing the demand for a company’s shares, open-market buybacks automatically lift its stock price, even if only temporarily, and can enable the company to hit quarterly earnings per share (EPS) targets,” Lazonick states. And let us not forget that many board directors receive stock awards for their service to the corporations.

Among the 10 corporations devoting the most resources to stock buy-backs, most (Microsoft, IBM, Cisco, Proctor & Gamble, Hewlett-Packard, Intel and Pfizer) actually spent more than 100% of their respective profits on the repurchases. How? They went into debt to do so. Because what price is too high when you essentially are rewarding yourself?

So bottom line, as of Sept. 1, 2014, the chief executives and board members of most of America’s biggest public companies are not busy trying to create wealth throough innovation or service or technological or manufacturing know-how. Instead, they are busy trying to extract wealth as quickly as possible from some of the greatest business innovators of America’s past.

If you’re still puzzled as to why your family income seems to be stuck in place while the price of everything continues floating upwards, perhaps the above may provide a moment of clarity.

Happy Irony Day, peasants. Have a beer on me.


Filtering Out Mobile Spam

by bdunn on August 18, 2014

in Communications, Geek

I don’t know if you can do this with a Windows PC, as I dumped that failed proprietary computer operating system long ago in favor of Linux. With a Linux PC and either your own mail server or a friendly Internet service provider, I’ve found that you can cobble together a system that so far has removed 100% of the spam email from my mobile phone.

This was a big deal to me, as I have multiple email accounts and use email heavily to get things done. On my desktop, I run a Linux email client program called Claws Mail, which is pretty great once its set up properly. It comes with two different spam filtering systems, one of which catches probably 90% of the spam sent my way.

But until very recently, I was snowed under with spam when checking my email accounts via my cell phone. For whatever reason, email apps for the Android operating system (and as far as I know for Apple phones as well) are unable to filter out spam. My spam load was so heavy that it could take me 10 minutes to go through a haystack of email before I found the one needle that was not spam.

Then, I gave it some thought and did this:

First, I created a new email account on my email server, with a name that for this post I’ll call spamfree@mydomain.com. Then, I went in to my phone’s email app, K-9 Mail, and removed all five of the email accounts I’d been monitoring. Then I added a single account to the phone – spamfree@mydomain.com.

This next part took some time, but to me it was worth it. In my desktop email client, Claws Mail, I have the ability to “filter” email messages according to a variety of conditions, such as who a message is from, who it is to, what the subject is, etc. I can have Claws Mail move certain messages to certain “mailboxes” to keep related messages or, say, family email, separate from the rest.

It turns out Claws Mail also can forward or redirect any email, based on the conditions above. This was the key to my system.

I set up my email filter rules so that any email from certain senders whom I consider important will be redirected to my spamfree@mydomain.com account. Thus, if my wife or one of my kids, or other relatives, or my friends, or contractors or business partners sends me an email, I will still get it on my phone. Voicemail also gets through to the phone, as do text messages.

But the spam crap that makes up probably 97% of my total email volume cannot get through to my cell phone. Instead, it is filtered into the spambox on my desktop computer.

The system isn’t perfect. On occasion I will get a legitimate email message from someone whom I never have met before, and such email will not make it to my phone. Really that’s not such a big deal, as I can answer that mail when I get home.

The biggest flaw in this new system probably is the fact that it won’t work unless I keep my home computer up and running all the time when I’m away. This can leave my computer vulnerable to thunder storms, which is a consideration I need to ponder.

But otherwise, the spam-load this has taken off of my phone is pretty impressive.

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Chicken Tales

by bdunn on August 4, 2014

in Be Afraid, Big Ag, Factory Food, Government

I’m trying to be patient and wait a few years until, if things go as planned, my wife and I move to the Polka Farm full-time, before raising a flock of chickens. But it’s getting really hard to wait.

Drive-In ChickensI like eggs, and I like chicken meat. A lot. At a time when beef and pork prices have increased by about 6% and 13%, respectively, over the past year, I have, like many other American peasants, been forced to rely increasingly on the Factory Chicken for my grilling and roasting pleasure. Of course, new demand has caused chicken prices to rise also, but they’re still very cheap comparitively.

Unfortunately, you get what you pay for.

Some of America’s chicken factories have become most adept at producing little 4 and 5-pound vomit bombs, ready to go off on anyone who forgets to sufficiently overcook the meat.

For example, I give you Livingston, Calif.-based Foster Farms. Beginning in March of last year, whole chickens slaughtered and “processed” at Foster Farms California factories caused salmonella poisoning in 634 people in 29 states who reported it (and for every food poisoning case reported to the government, more than 25 cases go unreported). Of those cases, 241 people were sick enough that they had to be hospitalized.

Here’s the hilarious part: On July 31, the U.S. Centers for Disease Control announced that the Foster Farms salmonella outbreak “appears to be over.” But about a month earlier, the U.S. Department of Agriculture found Salmonella Heidelberg (an especially nasty antibiotic-resistant strain) in Foster Farms’ boneless and skinless chicken breasts. So yeah, one Foster Farms vomit outbreak has officially ended, but another one has just begun.

In case you haven’t figured it out, the moral of this portion of Our Story is, don’t buy anything from Foster Farms unless you really, really don’t like the people you’ve invited home for dinner.

But here’s the kicker: Chicken factories such as those operated by Foster Farms have been running under the watchful eye of USDA food inspectors trained to discover and remove diseased and otherwise digestively unsafe birds from the factory killing line before they make it to the grocery stores.

Considering outbreaks such as the ones at Foster Farms, you might not think the government inspectors are doing a very good job. But consider this: Chicken factores are allowed to run their killing lines at the speed of 140 per minute. This gives government inspectors .43 seconds to inspect each bird. I’m not sure if I could even tell if a chicken has two legs in .43 seconds.

Thus you come to see why so much of our factory-supplied meat is tainted with disease-causing microbes.

And if you thought it couldn’t be worse for the consumer, you would be wrong. Because just last Thursday the USDA gave its final approval to new poultry inspection regulations. You know those trained government food inspectors expected to detect diseased chickens whirring past them at the rate of 140 per minute? Well, now if the factory owners so choose, they are allowed to replace the government food inspectors with their own employees. And there is no training requirement for those employees.

Does anyone think those employee-inspectors will have a whole bunch of incentive to find lots of diseased birds and remove them from the killing line?

It’s for real: Buy a grocery-store chicken and you get a free packet of vomit gravy with each bird.

Buy somebody else’s pasture-raised chicken? Healthy whole chicken can buy you peace of mind and pretty great taste, but it will cost you about $4.50 per pound, or around $24 per bird.

All of which is why it’s so hard for me to put off raising my own.


Gardening With Don Quixote

July 21, 2014 Economics

The below couple posts notwithstanding, I labor under no misconceptions about the ability to provide a significant portion of my family’s food via my own efforts gardening or otherwise. Suffice it to say that I’m just making a tiny dent. For now. All the fresh tomatoes and figs, and herbs, and hot peppers, and later […]

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Chip Off Grandma’s Old Block

July 10, 2014 Food

I remember my grandma had a basement room brimming with canned applesauce and tomatoes and plums and other fruits and vegetables, and she was always adding to the collection. Now that’s me, straining under the crush of the harvest and turning it into this week’s meals and next winter’s happy freezer discoveries. You haven’t heard […]

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The Merry Old Month of Tomato

June 20, 2014 Country Life

The crush of the harvest is a problem, but one of my favorites. In a good year, time turns in on itself and an extra month overlaps May and June, called Tomato. We’re having a whopping Tomato month this year, which is good because last year’s never really materialized. Seven stout plants grew from the […]

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Dear Students: Bend Over & Take It

June 12, 2014 Education

Yup, they just shot down a bill that would let some of the poorest of Americans – college kids – refinance student loans totaling more than $1 trillion in order to take advantage of today’s lower interest rates. Just like the rest of us can do with our mortgages if we so choose. A pay […]

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