Category: Business and Society

Apparently Europe is buying in to the concept. Here are two key paragraphs from today’s Washington Post, in this article from Robert J. Samuelson, “The End of Europe”:

It’s hard to be a great power if your population is shriveling. Europe’s birthrates have dropped well below the replacement rate of 2.1 children for each woman of childbearing age. For Western Europe as a whole, the rate is 1.5. It’s 1.4 in Germany and 1.3 in Italy. In a century — if these rates continue — there won’t be many Germans in Germany or Italians in Italy. Even assuming some increase in birthrates and continued immigration, Western Europe’s population grows dramatically grayer, projects the U.S. Census Bureau. Now about one-sixth of the population is 65 and older. By 2030 that would be one-fourth, and by 2050 almost one-third.

No one knows how well modern economies will perform with so many elderly people, heavily dependent on government benefits (read: higher taxes). But Europe’s economy is already faltering. In the 1970s annual growth for the 12 countries now using the euro averaged almost 3 percent; from 2001 to 2004 the annual average was 1.2 percent. In 1974 those countries had unemployment of 2.4 percent; in 2004 the rate was 8.9 percent.

Blog author: jcouretas
Wednesday, July 13, 2005
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Bernie Ebbers got 25 years in the cooler for his role in the demise of WorldCom. If he serves the full sentence, he’ll be 85 years old when they let him out. Here’s how AP described his reaction when the verdict came down:

Ebbers sniffled audibly and dabbed at his eyes with a white tissue as he was sentenced. He did not address the court. His wife, Kristie Ebbers, cried quietly. Later, the two embraced as the courtroom emptied.

Now, set that picture against these remarks:

At the sentencing hearing, Henry J. Bruen Jr., 37, a former WorldCom salesman, told the court the company’s collapse caused “untold human carnage” and put him through “sheer hell.” He lost all of his savings and couldn’t get another sales job.

There are many thousands more who have been severely battered by the WorldCom collapse. Ebbers also had to cough up nearly $40 million of his own fortune as partial restitution for investors and employees whose retirement accounts were wiped out by the $11 billion accounting fraud. No doubt, many tears were shed by these unfortunates, too. Recently, The New York Times offered this summary of what Mr. and Mrs. Ebbers had to give up:

The assets that Mr. Ebbers has promised to turn over include $5 million in cash, 300,000 acres of timberlands in Mississippi, a prospective multimillion-dollar income tax refund, and interests in a major trucking business, a marina, a golf course, a rice farm, a hotel, a grain elevator company and other real estate ventures. He and his wife will also be required to vacate their multimillion-dollar home in Clinton, Miss., by October; it will be put up for sale. In addition, Mr. Ebbers has agreed to pay $450,000 to former WorldCom employees who sued him over losses they incurred in their retirement accounts.

So what’s the cure for this, and other corporate wrongdoings? Rev. Robert Sirico points to the solution in “The Ethical Challenge for Business,” a commentary written in 2002, that scandal plagued year:

If we are to learn anything from the ethical lapses of business this year, it should be that the Judeo-Christian moral code needs to be retrieved, not reformulated, much less wholesale politicization. Old truths need to be spoken into new contexts, remembering that the basic principles of right and wrong are discovered, not invented. Nor do they change based on circumstance or popularity. If this lesson is not learned from the corporate scandals, we cannot expect the moral standing of business, that activity that most people spend much of their time occupied with, to achieve a level worthy of human beings and a civilized culture.

Blog author: jballor
Wednesday, July 13, 2005
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The Melbourne Herald Sun reports, “Fast food could be subject to a new tax of up to 50 per cent under a plan to fight Australia’s worsening obesity epidemic. The proposed fat tax would, hopefully, steer consumers away from calorie and sugar-laden foods and force them to choose cheaper, healthier options.”

Blog author: jballor
Monday, July 11, 2005
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Following last month’s Supreme Court decision in No. 04-277, National Cable & Telecommunications Assn. v. Brand X Internet Services, which denied the use of established cable lines to high-speed ISP competitors, there might be a new addition to the broadband internet market.

High-speed internet access is now available in three main ways: via a cable modem, a DSL line, or satellite (this being by far the least common). There are advantages and disadvantages to each, but the Brand X decision solidified a cable company’s sovereignty to it’s own cable lines. This effectively reduces the pool of possible competitive vendors, since even if all three methods are available to you in your particular location (which very often one or more is not available), typically you have the option of only one vender per method.

But today’s Houston Chroncle reports on the possibility of high-speed internet access being made available through powerlines (called BPL, or broadband over power lines), perhaps adding a whole new set of competitors to the game.

And on a related note, check out the possibility that the Brand X decision confers the regulatory powers of the FCC in a radically new way to IP services.

In a recent commentary criticizing the fast food tax, I wrote,

the fast food industry is really too easy a target for the government. Besieged by the media and public opinion (consider the popularity of the film Super Size Me), quickservice restaurants have gotten the reputation for being extremely unhealthy.

But the truth of the matter is more complex. The National Restaurant Association reports that two-thirds of quickservice restaurants have added low-carb options to their menus. As usual, the service industry responds quickly and efficiently to customer demands.

Here’s some more proof: “NEW MENU CHOICES: Fast food changes quickly,” by Caron Alarab, The Detroit Free Press, July 8, 2005

Blog author: jballor
Friday, July 8, 2005
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As the jobless levels across the nation continues to decline, Michigan continues to lag behind. The nationwide unemployment rate decreased to 5.0% in June, to the lowest levels since September, 2001 according to reports. Meanwhile, Michigan remains at the bottom of the list with the worst unemployment levels, upwards of 7%.

But the key to understanding why these improving numbers have not translated into job gains in Michigan appears in the same report: “Factory payrolls shrank for the fourth straight month as auto assembly and parts plants cut back on production. A glut of inventories has prompted many automakers to slow production lines until demand can catch up. Some 96,000 manufacturing jobs have been lost since August 2004.”

Michigan’s manufacturing-centered economy has simply been unable to compete in the global marketplace, and state policies have tended to restrict rather than promote new business enterprise. An op-ed piece in yesterday’s Wall Street Journal argues that Gov. Granholm’s proposed tax plan

does nothing to reduce the excessive overall tax burden on job providers. The governor’s $2 billion bond proposal places taxpayer dollars under the control of “independent job creation experts” (the administration’s term; in the real world, we call them entrepreneurs) and instructs them to invest directly into the perceived industries of tomorrow.

This additional debt does nothing to improve Michigan’s attractiveness to investors, but instead hopes the administration’s handpicked experts will invest “other peoples’ money” effectively. And the governor’s $40.5 billion budget increases spending $1.6 billion above last year’s level and includes $300 million in tax increases. History and basic economics teaches us that Gov. Granholm’s attempt to tax-spend-and-borrow Michigan to prosperity will fail.

The answer to increasing economic growth, creating jobs and raising incomes in Michigan is simple and works whenever tried: Reduce taxes.

Blog author: jballor
Thursday, July 7, 2005
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ARMAVIRUMQUE passes along an excerpt from an article posted yesterday by The New Republic, “The Killing Machine,” by Alvaro Vargas Llosa. The article is about Che Guevara, and the famous photograph that “thirty-eight years after his death, is still the logo of revolutionary (or is it capitalist?) chic.”

Llosa interviews Javier Arzuaga, a former Catholic priest, self-described as “closer to Leonardo Boff and Liberation Theology than to the former Cardinal Ratzinger.” Arzuaga’s relates the following:

there were about eight hundred prisoners in a space fit for no more than three hundred: former Batista military and police personnel, some journalists, a few businessmen and merchants. The revolutionary tribunal was made of militiamen. Che Guevara presided over the appellate court. He never overturned a sentence…. I pleaded many times with Che on behalf of prisoners. I remember especially the case of Ariel Lima, a young boy. Che did not budge.

For more about Guevara, check out ARMAVIRUMQUE for a link to a story in The New Criterion, “The real Che,” by Anthony Daniels.

You may also recall the recent Hollywood release, The Motorcycle Diaries, examined in part in an Acton Commentary by Bruce Edward Walker, “Scary Movie: Hollywood Humanizes the Despot.” Walker writes that the film is “frightening in its attempts to humanize the South American ideologue and revolutionary Ernesto ‘Che’ Guevara. The film is an attempt to validate the Communist ideology as a cure for the diseases of poverty and illness and as a substitute for the religion that is, in the film’s depiction, petty and ineffective.”

So we see the irony of a rabid Communist like Che Guevara becoming a pop culture icon, so that, in the words of Llosa, “His likeness adorns mugs, hoodies, lighters, key chains, wallets, baseball caps, toques, bandannas, tank tops, club shirts, couture bags, denim jeans, herbal tea,” and more. Whence comes this contradiction?

As I commented in a relevant blog post over at Brad Warthen’s Blog, some of the contemporary appeal can be linked to the popularization and idolization of Guevara by Zack de la Rocha and the group Rage Against the Machine. Their music is featured in The Matrix movies, and they are perhaps most famous for their subversive politics and revolutionary ideology. The group was formed in 1990 and broke up in 2000, a decade in which their popularity peaked, influencing a generation of pop culture.

So says Dr. George Ayittey, a professor of economics at American University and founder of the Free Africa Foundation, in an interview on today’s Morning Edition from NPR.

Ayittey argues in part that after the African nations gained independence, they rejected the market system out of hand as a Western innovation, to the detriment of their societies. He calls for a return to indigenous structures of civil society, which embrace markets and free trade.

He also says that we need to distinguish between African governments and African people…a confusion that is simply made all too often.


Three separate studies
published by the Archives of Pediatrics & Adolescent Medicine suggests that too much TV-watching can harm children’s ability to learn. The article says that in one study, involving nearly 400 northern California third-graders, those with TVs in their bedrooms scored about eight points lower on math and language arts tests than children without bedroom TVs. A second study, looking at nearly 1,000 adults in New Zealand, found lower education levels among 26-year-olds who had watched lots of TV during childhood. A third study, based data on gathered from nearly 1,800 U.S. children, found that those who watched more than three hours of television daily before age 3 scored slightly worse on academic and intelligence tests at ages 6 and 7 than youngsters who watched less TV.

In our current political climate, the response might be to now pass a law limiting TV viewing in the home. Or maybe 26-year-olds will now start suing television companies for lowering their educational achievements? But, like all things in the market place, this study reveals that parents play a crucial role in mitigating technology in the home. The larger issue is not so much that television dumbs down children but the fact that what the market provides must be consumed with wisdom. What at home rules for kids work the best?

The following is from Archbishop Tomasi’s address at the 93rd International Labor Conference in Geneva. (Click here for the full text of his remarks.)

"It is the dignity of every human person that requires access to work in condition of personal security, health, fair renumeration, a safe environment. Work is a right and the expression of human dignity…work is the motor for development and poverty elimination, for unlocking the hidden resources of nature, for personal and professional fulfillment and family support, for social participation in the well-being of society."

And from the Catechism of the Catholic Church:

"In work, the person exercises and fulfills in part the potential inscribed in his nature. The primordial value of labor stems from man himself, its author and its beneficiary. Work is for man, not man for work."

From time to time, it is worth revisiting these basic but crucial premises of all fruitful discussions of labor.