Government Shutdown Equals Failure

Let’s suppose your local power company tried to prove a point to your city council by shutting off electricity, plunging the town into darkness. Or the real life example of a Chicago Teachers Union which went on strike during the school year, and were rightly cricitized for the tactics they used.

Every time the US government heads into shutdown, it represents the failure of the US Congress, or the presidency, to fulfill basic responsibilities. Indeed, each family in America prepares and executes a budget, answering to the needs of its members. They may do it on spreadsheets, or may do so in the back of their mind. The members of Congress certainly do not resemble the role of benevolent fathers and mothers at this time.

My work life continues, business as usual, during the shutdown. The shutdown is limited in scope, even leaving my alma mater, the USMMA, unaffected. But there are inconveniences. Uncertainty among civil service in DC is likely putting a damper on the local small business economy, as previous shutdowns did. My correspondence with the US Coast Guard’s civilian-focused National Maritime Center is delayed. While of little consequence to me, it could mean lost job opportunities to other mariners, if they can’t get credentials issued on time.

So, please, Congress, do not let identity politics and rigid ideologies hurt constituents any longer. Voters, too, should remember in 2020.

When Cash is Joker

     Today, with Paypal and Square, even the smallest merchants are connected to digital payment. Bitcoins are totally cyber.  So discussing currency, especially denominations other than the greenback $20, might seem nostalgic. Numismatists, a.k.a. coin collectors, recognize long-obsolete denominations of money: Half-cent coins issued until 1857, large 2 cent coins during the Civil War, small antebellum silver 3 cent coins, and the short lived 20 cent coin of 1875-1876. The small print tells you that it isn’t a quarter. One-cent pieces (pre-1857) and dollars (pre-1979) used to be larger.

     To compare then-and-now circulation of money, I like to use “Jurgis Rudkus” or NYC Subway Fare metric. It does not account for real changes in the price of goods. For example, the real cost of a New York City subway ride ($2.75 today) has doubled since opening in 1904. So the Bureau of Labor Statistic’s CPI calculator is better, when the internet is readily available. Jurgis’ boss might’ve had gilded age gold coins in $2.50 and larger denominations, at a time when laborers made a dollar per day. We know Jurgis, a laborer in the Chicago Stockyards, through Upton Sinclair’s The Jungle.

     Some denominations have fallen out of favor. Take the one-cent piece, or colloquially- the penny. Due to the percent tax and the psychological deception of $.99 pricing, we have been stuck with the penny. Sure, stores could choose to round down the purchase. In overseas shops using US currency, pennies; even nickels and dimes, are dropped. In Dubai, I saw the 1 dinar coin used as ersatz American quarters.

     Half dollars are widely recognized at all classes of convenience stores, where cash is king. Exception is the shopettes on-base, which serve a straight-laced clientele. Elsewhere, the half dollar is not readily recognized, but most often accepted nonetheless. Their availability at banks is capricious, and the futility of using them in laundry, vending and other machines is frustrating.  

     Despite the US Mint’s best efforts, dollar coins are not the “hip new thing” millennials are clamoring for. If you use a silver-toned Susan B. Anthony dollar coin, make sure it’s not mistaken for a quarter. It was a short-lived series that immediately followed the Nixon-era large Eisenhower dollars. The Sacagawea gold-toned dollar coin fares better. They are the mainstay of mass transit machines, and circulate freely in downtown shops. To stir more interest in auto-centric areas, the US Mint concurrently introduced the Presidential Dollar Series. The Sacagawea series continued concurrently as her peoples’ sworn enemies Andrew Jackson, Zachary Tyler, and colleagues were commemorated in coin.

     $2 bills are a popular Christmas gift. They are accepted on Hampton Roads Transit’s GFI fareboxes, a type that is used around the country. But many younger cashiers do not recognize the bill, even in entertainment-focused locales like San Juan.

     $10 bills: Many stores do not stock these bills in cash registers at the start of shift. $5 bill became the workhorse of the economy. Where a seeming inefficiency is king, this orange hued bill is squeezed out by the $5 and $20 bills. I would also blame inflation, which makes $20 bills more easily broken by cashiers.

     $50 bills: Due to inflation, these are now convenient for grocery shopping, dinner out, and oil changes for the car. Also issued by Navy Federal ATMs in high-priced countries like Bahrain. For all purposes, though, the larger “C Note” remains more popular.

     $100 bills: A mainstay of the cash economy. In the cutthroat world of commercial shipping, if a sailor can’t deposit a paycheck immediately, he or she would prefer cold cash in hand. For those sailing on government ships backed by the full faith of Uncle Sam, the Benjamin is used for the seemingly contrary purposes of Western Union family remittances and entertainment. Overseas, it’s safer to carry cash than to trust an entertainment venue with a credit card. The Benjamin is also required when exchanging for local currencies in underdeveloped economies.

     $500 bills (and larger): Banks have not issued them since 1969, a time when $500 could buy a new car. Yet, unlike deflated or obsolete European currencies, these big bills have not been demonetized. Thus the Federal Reserve keeps track of these large bills remaining in circulation, presumably in collectors’ hands and senior citizens’ safes.

 

Now have a happy new year!

Discipline of Quality Control

Had I been born 20 years earlier… I wouldn’t have invented the internet, but I might have been a messenger for the message of quality control. Someone defined stupidity as “doing the same thing and expecting different results”, and apparently that is what large companies like the auto makers were doing in the 1980’s. “We’re Number Five”, boasted Buick: This became the title of a chapter in Chuck Colson’s book, “Why America Doesn’t Work”, a book which I have reviewed on this blog. Quality Control, Continuous Improvement, Lean Processes,  Cost-Quality-Schedule; these were terms I learned to breathe in college. Where do these high-minded ideals fit in the real world? Last year I took the CAPM test- Certified Associate of Project Management- to see how my education in “Shipyard Management” measured up to other undergraduate management courses.  I was up to par.

Taylorism, originating in the early 20^th century, took autonomy away from workers, with a vision of “slide rule and stopwatch”. In place of craftsmanship, writes Chuck Colson, came a feeling of disassociation between employees and their work. Dr. Deming, who emerged after World War Two, insisted that employee buy-in was essential for successful quality control. The Japanese, whose industries were flattened by war’s end, bought into this idea. The Americans held off.  

Union Carbide or Bethlehem Steel, anyone? On that note, I’ve looked at pictures of the now-abandoned Martin Tower, Bethlehem Steel’s former headquarters in Pennsylvania. After-hours access required employees to state their name, department- and alphanumeric personnel code.  Humble the peons! This is Illustrative of rigid thinking; just one of the factors that allowed the continuously-improving Japanese to eat Bethlehem’s lunch.  The Dilbert cartoon contemporaneously parodies the corporate world’s discovery of quality control.  Beginning in the late 1980’s, Dilbert’s Pointy Haired Boss comically portrays the implementation of Japanese methods, from implementing sleeping tubes to animal costumes; to training sessions conducted with no clear objective. 

I said in a previous blog post that big business today is a finely tuned machine. Buick went bankrupt; and it seems that today, a low-performing CEO would be sacked rather than be rewarded with a bonus. This perfection cuts both ways for the consumer. Yes, you might get the right product in the mail, but expect no perks.  I recently ordered a book “How Boys and Toys Were Made”, a story about AC Gilbert and the once-famed Erector Set. Two-day shipping became six-day shipping over a holiday weekend- all accurately predicted by the website. I ordered on Thursday and received the book on Wednesday, not a day late nor a day early.  

This “new way of thinking”- employee empowerment for better, quantifiable results- specifics be darned- has been co-opted by the right-to-work movement, which insists that labor unions, working as an intermediary between workers and management, are not compatible with these worker-enabling production and quality methods. My own experience? The Department of Defense is looking into Six Sigma’s Lean Operation system. In addition to being a valuable credential, it would put a formal cap on what we were already doing- predictive maintenance and statistical analysis. It could be received with skepticism by the tradesmen- is it just another management tool that prefers the science of data over the art of skill? Brainwork over brawn? You can now see how employee buy-in matters.

Merry Christmas!

Christmas season started for me on December 21^st, almost a month after Black Friday and weeks after many already maxed out their credit cards. I went to a big box store. It was late and I already had a long day that started before 4am. The ship and I had been at sea, almost continuously, for a month, and  we quietly pulled into port.   As I made my last Christmas purchases- mostly premeditated with a few impulse decisions, I was bumped into by other weary shoppers hustling like Olympic sprinters. 

They used to say that once the crowd talks about the stock market, it’s time to sell. But the post-election stock market surge kept good times rolling. So much so that one guy told me that his stock market gains were larger than his paycheck. I congratulated him on behalf of Uncle Sam, who appreciates the hard work of passive income by giving a lower tax rate. 

Conspicuous consumption is back, with new products to “solve” the problems of the rich and “mass affluent”. You can see a stream of “Happy Holiday” ads that make you forget the reasons for the season (the Temple in Jerusalem for Jews or Christ’s Birth for Christians), not to mention songs about bigger and better presents. 

The millennials have more enlightened  spending habits; they prefer to spend on priceless and timeless experiences. Plane tickets to visit faraway family?  It’s important. I whipped out a credit card, rented a car, loaded it with my Christmas trinkets, and drove home.  I spent two wonderful days with my family; now it was time to plan for an unforgettable New Year’s. Should I bring the nice secondhand Italian suit; or is that overkill for Norfolk, I thought? As I was driving back to work for a shift on Christmas Day, I heard a song that I haven’t heard before. Amazing, since it played the year I was born. The song was called “The Gift”, by Garth Brooks, and its protagonist is a poor orphan girl named Maria:

“There were diamonds and incense and perfumes in packages fit for a king;

but for one ragged bird in a small cage Maria had nothing to bring...

Just then the midnight bells rang out and the little bird started to sing
A song that no words could recapture, whose beauty was fit for a king”.

Merry, Joyous, Christmas to all.

The Value and Price of Work

A rare books review on the blog. By chance in the ship’s library, I read two books that turned out to be a before-and-after on America’s poor and working class. “Why America Doesn’t Work” is a commentary on the ‘decline’ of the American work ethic. Written in the early 1990’s book, it includes firsthand examples of the Soviet elite’s corruption and the failed state they ruled. On their trip to the USSR, the author saw two things that worked: the black market…and the gulag, where productive inmates were able to earn overtime as an incentive. “The beginning of a free market?” the author noted.  Chuck Colson and Jack Eckerd sounded an alarm about a growing cultural and income gap between workers and the ruling class. Twenty-five years later, our new President of the United States was able to capitalize to victory on voters’ concerns about those educated, connected elites.  These voters even included “college educated whites”, who turned out to be Trump’s stealth supporters. What were Chuck Colson’s concerns?

A welfare system that punished work (known as AFDC)

A prison system that encouraged idleness and recidivism

Schools failing to educate students

Apathetic university students waiting to graduate with huge salaries

Big businesses allowing Japan and West Germany to eat their lunch

“Age of Aquarius”, the prominence of leisure, decline of morals such as honesty.

Money-lusting, middle class, Self-interested teens slacking on the job

Oh… and the lack of mutual respect between employee and employer.

And most prominently, that the old saying “An honest day’s work for an honest day’s pay” was now a Jay Leno punchline.

Some changes have happened since. Businesses have smartened up, embracing quality control, innovation (read: Fast Company, which began in 1995) and keeping a closer check on “time theft”. It’s less likely for new graduates to trip into a high-paying Wall Street job. Morals might be firming up, says Gallup,  if you leave out loosening opinions on drugs and marriage. Today, we have charter schools, No Child Left Behind, a well-intentioned program; and “high achieving students” are noticed. Some new employer-employee models have been tried, such as a uniform pay rate (one company had a $70,000 a year minimum salary) and adult playgrounds at tech companies. Hipsters and the Maker Movement are bringing back a culture of craftsmanship and restoring the dignity of work- even in once-menial jobs like coffee-wenching.

Shortly after the book was written, Bill Clinton, one of those New Democrats, and Newt Gingrich’s Congress, ended “welfare as we knew it”. What happened to the poor? We learn about them in “Nickel and Dimed”. The author laments that there was no provision in the welfare reform bill to track its effects. She had some not-so-good numbers from research groups, but decided to explore the mystery of the working poor. 

The author, Barbara Ehrenreich, accustomed to a comfortable lifestyle, dives into the world of minimum wage work. Notably, she attempts to pay rent in motels and apartments without a significant other or roommate pitching in. I know this challenge myself: without paying rent, my high school lifeguard job at $8.50 per hour felt like rolling in dough; a post-collegiate job offer thrice that rate was enough to make ends meet, considering rent. So I was intrigued. The book was written 15 years ago, but many of the truths remain the same. 

Transportation and Mobility

The bewildering question of why workers working for minimum wage were not upwardly mobile- why didn’t they flock to jobs paying a bit better? Why were they passing up a seeming opportunity? There is the unpaid time that would have to be invested in finding and securing a job. Not the monthly bills middle-class people face, but the daily fees like motel rooms. Management issues were a concern; middle managers (themselves not well compensated) were presented as lacking in leadership skills, so workers often decided to resign themselves to the “devil you know”. But the overarching issue is the question of access to these better paying jobs. Sure, riding infrequent bus routes in the suburbs is inconvenient and time-consuming, but doable. Until you consider the need to pick up the kids from school, or to go to a second job. Changing jobs would require rearranging one’s transportation.

Subsidence

When I go grocery shopping, I scratch my head at some of the bills. They seem bigger than last year; even more than just two months ago. For me, I take the information and look to see if my credit union is also increasing its rates with inflation- on savings accounts. For the working class, no good comes out of higher grocery prices. It isn’t expensive to eat healthy (but it’s not cheap either!)

The author noted that her co-workers were filling themselves with high-carb, high-fat junk food, with long-term health effects. That was all they could afford. As for the nasty cigarette and booze stereotype associated with the poor, I was interested to learn that being a smoker was a way to get a smoke break- a few minutes’ time off the job. The small amounts of cheap alcohol eased aches and pains associated with their labor. As a country singer sung: “…beer sitting on ice, after a long hard day, tastes just right”.

Today, the cost of a combo meal at a fast food restaurant is the same as a healthier meal at a take-out place. It seems like these fast food establishments are preying on a lack of knowledge of alternatives. We live in the information age; those who have knowledge have the power.

Marginalization

During the 1990’s, it appeared that little attention was paid to the minimum wage as the middle-and upper-classes increased in wealth through salaries and a go-go stock market. Fifteen years later, some of the dynamics have changed. Due to the living wage movement, the minimum wage will be $4.25 per hour higher in DC than neighboring Virginia; the author noted that increased minimum wages do have a spillover effect. Also, with job growth moving from sprawl to transit-oriented town centers and inner-cities, are the transportation issues faced by the working poor getting better?

The author noted some cultural factors affecting the visibility and esteem of the working class:  Market segmentation meant that wealthy shoppers “never rubbed shoulders” with the poor, loss of middle-class teen interest in summer and after-school jobs, and marginalization by popular media. And secondhand clothes meant that the poor no longer have to “look poor”. 

Housing Issues

One thing that is different is gentrification, a factor that didn’t have to be considered in 1998. The author worked solely in suburbs and small towns, while noting that the poor were concentrated in the inner-cities. Today, as cities gentrify, and the working class is squeezed on housing cost or commuting time.  Luxury apartments are replacing alternative- and necessary- living arrangements like the Joyce “hotel” in Portland, Oregon, or YMCA-style Single-Room Occupancies with bathrooms at the end of the hall. These arrangements are an important buffer against homelessness. For the author, it was a major struggle saving enough to make first month’s payment, and tiding over any unexpected health or car expenses. The largest secret, perhaps, is that the poor tended to live with roommates, other working family members, or a boyfriend- well after their twenties are over.

Management

More than ever, retail companies want managers for the lowest cost possible; so much so that Vice President Joe Biden wants to redefine who is a manager under the Labor Department’s salary provisions. Managers sometimes do not have the toolbox of leadership skills to be effective; and sometimes forget that they themselves may have been the lowest minimum-wage employee at one time* .Technology has changed; gone are the days of employees pacing themselves in big-box stores; Amazon’s partner warehouses track employees’ movements by the second, and use algorithms to get the maximal and most efficient use of the employee’s time.   “With slide rule and stopwatch our pride they have robbed”, goes a Dropkick Murphy song.

* It is notable that workers earning a tier above minimum wage tend to have the strongest opposition to increasing the minimum wage, since they worked for their payraise.

The author remains objective, and refuses to speculate on outside factors like immigration, including the effects of illegal immigration on wages. The rising tide did not lift all boats; greater demand for workers didn’t translate into increased earnings, as a classical economist would believe. This book was written at a time of abundance of low-wage jobs, a prospect which is finally returning after the last recession. Working within fragile transportation and social constraints, they live life on the edge. The book sparked a moral argument- whether it was right to ask someone to work for less than sustenance wages; and leaving workers in worse physical condition than when they hired them. Conservatives also questioned the wisdom of needing to indirectly subsidize low wages- provide corporate welfare- through public assistance. Our gleaming, post-industrial cities rely on a large army of working-class people to serve. How are we serving them?

Two years ago, I bought wholeheartedly into the idea that changes in the economy demanded “a new relationship of empowerment” between employers and employees. That was a nice code phrase for reducing the power of labor unions, especially used in the right-to-work debate. I am more wary of the statement now, demanding to see concrete examples of how decent workers will benefit. I’d like to humble myself and tell my relatives, “you were right”.  

Twenty years after welfare reform, what happened to the New Democrats? They brought the Northeast back to the Democratic Party. But their days became numbered when the ends justified the means. Feminists knew that the affair between Bill Clinton and Monica Lewinsky was unsavory, but they had larger goals in mind, like defending abortion. Likewise, I feel that liberal supporters of the Democratic Party are too willing to overlook troubles in the DNC, such as resignations under allegations, accusations of pay-to-play, and losing once-loyal union votes in the Midwest. While I believe in meritocracy, more than a few people have observed that there are “too many white septuagenarians in leadership positions”; in a party that is becoming majority-minority. Topics like environmentalism and social issues, favored by their donors, have received more detailed attention than topics that matter to their voters, like educational and employment opportunity. The DNC and media voices have encouraged playing it cautiously, because “there is too much at stake”.  One progressive commentator wrote an article titled “Bernie Sanders is a Privileged Choice”, arguing that the poor could lose everything if Bernie failed to win the general election. The language of political correctness was limiting their political options. But with the exception of 2012, the DNC has had eight straight years of losses. Even if “local races don’t matter”, losing the winnable presidency may be a wake-up call to change strategy.  In contrast, the turmoil in the Republican Party- from losing Congress in 2006 to the anti-establishment Tea Party movement- created a party that is more libertarian and less neocon than eight years ago; and a party that wins wide across the map, and deep in the “red” states. Nixon’s Southern Strategy and this year’s Midwestern Strategy were gambles that paid off. Murdoch and Akin in 2012, that was a bad choice. They should never do that again. That’s all of my political screed.