economy

The Gaurdian has an article that starts off:

No wonder Iceland has the happiest people on earth

Highest birth rate in Europe + highest divorce rate + highest percentage of women working outside the home = the best country in the world in which to live. There has to be something wrong with this equation.

Of course. Can't have women outside of the home.

But a high birthrate doesn't necessarily have to be a bad thing. High divorce rate could be an indication of fewer unhappy marriages.

And we all know now that societies with more women participating not just in the workplace but in management thrive more than other societies.

So what's the "something wrong" here?

'That is not something to be proud of,' said Oddny, with a brisk smile, 'but the fact is that Icelanders don't stay in lousy relationships. They just leave.' And the reason they can do so is that society, starting with the parents and grandparents, does not stigmatise them for making that choice. Icelanders are the least hung-up people in the world. Thus the incentive, for example, 'to stay together for the sake of the kids' does not exist. The kids will be just fine, because the family will rally round them and, likely as not, the parents will continue to have a civilised relationship, based on the usually automatic understanding that custody for the children will be shared.

Reykjavic, Iceland, May 2008: City Councillor Oddny Sturludottir tells us why Iceland is the best place in the World. Photograph: Ari Magg
The comfort of knowing that, come what may, the future for the children is safe also helps explain why Icelandic women, modern as they are (Iceland elected the world's first female president, Vigdis Finnbogadottir, a single mother, 28 years ago), persist in the ancient habit of bearing children very young. 'Not unwanted teen pregnancies, you understand,' said Oddny, 'but women of 21, 22 who willingly have children, very often while they are still at university.' At a British university a pregnant student would be an oddity; in Iceland, even at the business-oriented Reykjavik University, it is not only common to see pregnant girls in the student cafeteria, you see them breast-feeding, too. 'You extend your studies by a year, so what?' said Oddny. 'No way do you think when you have a kid at 22, "Oh my God, my life is over!" Definitely not! It is considered stupid here to wait till 38 to have a child. We think it's healthy to have lots of kids. All babies are welcome.'

All the more so because if you are in a job the state gives you nine months on fully paid child leave, to be split among the mother and the father as they so please. 'This means that employers know a man they hire is just as likely as a woman to take time off to look after a baby,' explained Svafa Grönfeldt, currently rector of Reykjavik University, previously a very high-powered executive. 'Paternity leave is the thing that made the difference for women's equality in this country.'

Hmmm.... Maybe progressive values are actually good for children?

Imagine this happening in this country.

3 recessions under Bush presidents. (3 Republican recessions, many would say.) But this one is the worst since the post-War period [audio].

Should we really be surprised?

Apparently being poor in America means going out to eat, living a comfortable life, but perhaps having to cope with an "old car" or a "black-and-white television" -- as opposed to back in the '50s, when people had to live "modest lives."

Apparently there's no "net" cost to globalization borne by America. On the whole, it's not like anybody is suffering, right? Right?

Apparently "centralization of power" -- of which O'Rourke claims to be suspicious -- does not include the multinational conglomerates that run our government and have quite a bit of power, thank you very much.

Apparently there is no real poverty in America. Apparently the disappearance of the middle class didn't happen because apparently there never was a middle class -- just people living "modest lives."

Apparently we're supposed to be happy because we're better off than Lebanon and Russia.

Apparently there is no economic basis for requiring trading partners to follow similar rules about the environment or child labor.

This from the white male living in his suburban house in the suburbs, enjoying what -- six-figure income? Seven? What does P.J. O'Rourke know about poverty in America?

Obviously not much.

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The Sunday before last, George Will on This Week made the oddball assertion that 25,000 people applying for 350 job openings at a new Wal-Mart is a good thing. (!)

I think of Russell Crowe in Cinderella Man, pressing at the iron gates, trying to be noticed, trying not to offend the foreman, the master of all destinies who decides who shall have a job and who shall not. That's just a movie, but it's based on the reality of the 1930s fall-out from Republican free-market adventurism -- the Great Depression, the result of The Crash of '29.

Apparently, those were the good ol' days. The Great Depression is George Will's example of a thriving economy at work.

Now Will has worked the Wal-Mart story up into another Liberals-Are-The-Force-Of-Evil kind of essay.

A large majority of the customers of the Wal-Mart that sits here, less than a block outside Chicago, are from the city, and more than 90 percent of the store's customers are African American.

One of whom, a woman pushing a shopping cart with a stoical 3-year-old along for the ride, has a chip on her shoulder about the size of this 141,000-square-foot Wal-Mart. She applied for a job when the store opened in January and was turned down because, she said, the person doing the hiring "had an attitude."

Message: Be meek and humble like Jim Braddock in Cinderella Man. If you don't get the 1-in-100 job, it's your fault. Uppity people should not apply. The poor should know their place, doncha know?

So why is the woman shopping here anyway? She looks at the questioner as though he is dimwitted and directs his attention to the low prices of the DVDs on the rack next to her.

Sensibly, she compartmentalizes her moods and her money.

Message: Despite being poor, she is a sensible person. Surprise!

It really is almost funny how George Will tries to explain the motivations and experiences of people from the opposite end of the economic spectrum. I wonder how many times Will has been forced to limit his grocery shopping options. I wonder if Will even does the grocery shopping. (Does he even cook? I have no idea.)

Yet George Will puts himself up as some sort of Authority on American Life. This apparently is due to the wise insight gained from being a highly paid television personality for decades.

Now, having dipped his toe into the working poor's perspective, though, he quickly trots across the deck to the stock-investor's jacuzzi:

Wal-Mart, the most prodigious job-creator in the history of the private sector in this galaxy, has almost as many employees (1.3 million) as the U.S. military has uniformed personnel.

These jobs are working poor jobs. You work full-time, and you're still below the poverty line. Think of how Braddock was working full-time -- every day -- working with a broken hand even, and still he could not pay to keep his family. This is the American Dream, George?

How ironic that Will equates working for Wal-Mart and working for America's security. Fighting the threat of encroachment of the poor into middle-class life is right up there with going after al-Qaeda, it seems.

A McKinsey company study concluded that Wal-Mart accounted for 13 percent of the nation's productivity gains in the second half of the 1990s, which probably made Wal-Mart about as important as the Federal Reserve in holding down inflation.

Let's translate: Productivity goes up when you get more work for less money. In other words, by holding up productivity as an abstract measure to praise, without any human context, you are hailing the reduction of working wages as a measure of success.

It sounds like Will is completely with the dock bosses and not the desperate workers on the other side of that iron fence.

By lowering consumer prices, Wal-Mart costs about 50 retail jobs among competitors for every 100 jobs Wal-Mart creates.

Do the math: 100 jobs = 50 jobs ==> hourly wages are half. Now, some might point to economies of scale and opportunities for better deals on the part of management, so maybe the wages aren't quite down to half. On the other hand, remember, productivity has gone up, so more product is going out per dollar. No matter where it falls, suffice to say those wages are pretty damned poor.

Wal-Mart and its effects save shoppers more than $200 billion a year, dwarfing such government programs as food stamps ($28.6 billion) and the earned-income tax credit ($34.6 billion).

Ah, but Will is leaving something out: Wal-Mart employees are on food stamps. It's documented:

We estimate that Wal-Mart workers in California earn on average 31 percent less than workers employed in large retail as a whole, receiving an average wage of $9.70 per hour compared to the $14.01 average hourly earnings for employees in large retail (firms with 1,000 or more employees). In addition, 23 percent fewer Wal-Mart workers are covered by employer-sponsored health insurance than large retail workers as a whole. The differences are even greater when Wal-Mart workers are compared to unionized grocery workers. In the San Francisco Bay Area, non-managerial Wal-Mart employees earn on average $9.40 an hour, compared to $15.31 for unionized grocery workers—39 percent less—and are half as likely to have health benefits.

At these low-wages, many Wal-Mart workers rely on public safety net programs— such as food stamps, Medicare, and subsidized housing—to make ends meet. [Emphasis added.]

In fact, it's part of Wal-Mart's business plan:

California Assemblywoman Sally Lieber, who represents the 22nd Assembly District and is a former mayor of Mountain View, was outraged when she learned about the sex discrimination charges in Dukes v. Wal-Mart, and she smelled blood when, tipped off by dissatisfied workers, her office discovered that Wal-Mart was encouraging its workers to apply for public assistance, "in the middle of the worst state budget crisis in history!" California had a $38 billion deficit at the time, and Lieber was enraged that taxpayers would be subsidizing Wal-Mart's low wages, bringing new meaning to the term "corporate welfare."

Lieber was angry, too, that Wal-Mart's welfare dependence made it nearly impossible for responsible employers to compete with the retail giant. It was as if taxpayers were unknowingly funding a massive plunge to the bottom in wages and benefits - quite possibly their own. She held a press conference in July 2003, to expose Wal-Mart's welfare scam. The Wal-Mart documents - instructions explaining how to apply for food stamps, Medi-Cal (the state's healthcare assistance program) and other forms of welfare - were blown up on posterboard and displayed. The morning of the press conference, a Wal-Mart worker who wouldn't give her name for fear of being fired snuck into Lieber's office. "I just wanted to say, right on!" she told the assemblywoman.

The Christian Science Monitor, on MSN Money, asks, "Is shopping at Wal-Mart immoral?"

Some recent research suggests the low prices and job opportunities offered at a new Wal-Mart store don't alleviate a community's struggles with poverty over the long term. Wal-Mart workers in California, for example, annually seek $86 million worth of public assistance, according to a 2004 study by the Labor Center at the University of California at Berkeley. If other big retailers in the state follow suit, the study projected, California taxpayers would have to foot another $410 million in healthcare services, food stamps and other public costs.

This "race to the bottom" in labor costs also seems to rub off on a surrounding area, according to research from economists Stephan Goetz and Hema Swaminathan at the Northeast Regional Center for Rural Development at Penn State University. While the national poverty rate dropped 2.4% between 1990 and 2000, the rate fell by just 0.2% on average in counties that added a Wal-Mart. One theory: Although Wal-Mart creates jobs, the company also eliminates jobs by putting others out of business.

The sad part about it is that Wal-Mart employees can't afford to shop there. (I'd like to see George Will make ends meet on $1000 a month.)

Ah, but the good news is that Wal-Mart employees can use their food stamps when they shop at Wal-Mart -- or at least some Wal-Marts. (Not all Wal-Marts accept food stamps. Sorry. Now get back to work!)

Will then reveals his truth:

Liberals think their campaign against Wal-Mart is a way of introducing the subject of class into America's political argument, and they are more correct than they understand. Their campaign is liberalism as condescension. It is a philosophic repugnance toward markets, because consumer sovereignty results in the masses making messes. Liberals, aghast, see the choices Americans make with their dollars and their ballots and announce -- yes, announce -- that Americans are sorely in need of more supervision by . . . liberals.

Will seems outraged that his religion -- his god, The Market -- might be questioned. He is so divorced from reality that economic abstractions mean more to him than the human condition.

Economics is a well-developed means of trying to understand, evaluate and quantify in aggregate the diverse, individual choices each person makes.

By holding up The Market as some sort of omniscient entity, some holy truth that shall not be questioned -- in other words, a god -- Will is making a religious argument.

But economics is purportedly a science, not a religion. It's based on reason -- and, in most cases, assumes rational acts on the part of all parties -- and thus must stand up to reason. Economics is a tool. Economics is a means to understand the reality. Economic abstractions are not the reality.

"The Market" is an ideal thing used in economics. The Market is merely an abstraction. It is not the holy truth, and measuring The Market does not measure people's lives.

Will claims that liberals believe "Americans are sorely in need of more supervision by . . . liberals," but what he really fears is that The Market may be impacted by Keynesian economic policies that work to improve the lot of millions of poor. Why? Because such measures might affect investor portfolios -- and that's part of an economic reality George Will knows. He's just talking out his backside by arguing from the perspective of the poor, and defending his point of view by a religious argument deifying The Market.

What is this focus of evil in the modern world?

--Will asks. Apparently the answer is "liberals," for blaspheming his god. And maybe threatening his pocketbook portfolio.