Goodbye Middle Class

The J.C. Penney closing of 33 stores is a reflection of the decline of the middle class. Comments by readers of this Huffington Post article, I believe, accurately appraises this situation. There is nothing being said about how Penney’s will recover.

Sears Holdings Corp. (SHLD:US) plunged the most in more than a year after forecasting a fourth-quarter loss and saying sales during the holiday period dropped. The loss in the quarter ending Feb. 1 will narrow to $250 million to $360 million, or $2.35 to $3.39 a share, the Hoffman Estates, Illinois-based company said yesterday in a statement. The net loss a year earlier was $489 million, or $4.61 a share.

If these stalwarts cannot survive the message is clear. The middle class, that was the bread and butter for those retail stores, is shrinking away.

It is not an overnight event. As those middle incomes and retired middle class families die the replacements come in just two categories. They are the poor and the well to do. Evidence of this situation is the age of McDonald’s employees. The average age of a fast-food worker in 2013 was almost 30. That is data published by Bloomberg Businessweek. The Bureau of Labor Statistics says that more than 35% of the unemployed have been in that predicament for more than 27 weeks. Most of them had well paying middle class jobs.

Meanwhile the median annual compensation for the CEOs of S&P 500 firms is now reported to be above $10 Million. Carol Meyrowitz, the CEO of TJX, earned over $20 Million in 2013. TJX owns Marshall’s, TJ Max, and Homegoods stores. Anthony Petrello was the highest paid CEO earning more than $68 Million last year.

Of course the board of directors of every company is free to pay whatever they deem a fair salary. Government does not set salaries in a free society. Those CEOs must be worth the pay they receive. Or is it the rich protecting the rich? Does the CEO work harder than the clerk?

So what is to become of most Americans? Look for more food stamps, more housing subsidies, and more broken homes.

Private enterprise does not care about its employees. They are interested in maximizing their profits. Don’t like it? Open your own business. That is the way capitalism works.

Obama: Skilled Politician, Lousy Manager

Doyle McManus’ column in today’s Los Angeles Times on-line edition identifies the reality of the Barack Obama presidency.   Given the history of past presidential failures can anyone do this job? What failures? Iran-Contra, Bay of Pigs, Hostages in Iran, Financial Meltdown, etc.

May 24, 2014

We don’t normally expect our presidents to pay close attention to how long veterans are being asked to wait for care in the vast medical system run by the Department of Veterans Affairs.

But we do expect presidents to appoint Cabinet officers and other aides who can run the federal government well — well enough, at least, to prevent full-blown scandals from erupting.

That’s what the VA’s long-running scheduling problems have turned into after reports that veterans died while waiting for medical care — and bureaucrats apparently manipulated records to make their performance look good when it wasn’t.

No one can read the stories of individual veterans who suffered at the hands of the bureaucracy — like Edward Laird, a 76-year-old Navy veteran who lost half of his nose because he had to wait two years for cancer tests — without feeling helpless fury.

And those stories are certain to keep coming.

It’s an especially dangerous scandal for President Obama because it fits into an established narrative about his presidency: that he’s a skilled politician and speechmaker but a lousy manager.

The biggest problems Obama has faced in the White House — aside from unrelenting opposition from Republicans in Congress — have come not from making policy but from trying to implement it. The calamitous launch of his healthcare plan last fall is the biggest and most painful example, but it’s only one of several.

The 2009 economic stimulus plan’s “shovel-ready” projects that took months to start, the confused response to the 2010 BP oil spill, the flap over IRS scrutiny of conservative organizations, even the State Department failures that led to the deaths of four Americans in Benghazi in 2012 — all were mainly lapses in management, not policy.

The president’s conservative critics have accused him, often wildly, of every sin they can think of, from diabolical conspiracy (in the case of the IRS) to dereliction of duty (Benghazi). But the charge that’s likely to stick is one that connects all those unrelated events to an underlying truth: Obama has never paid as much attention to the nitty-gritty of management as he has to making policy and campaigning for votes.

“Presidents get elected because of their rhetorical skills, but they succeed or fail based on their managerial skills,” warned Elaine Kamarck, a former White House aide to Bill Clinton who directs a center on public management at the Brookings Institution. “In this administration … somehow, there is no adequate communications system; the White House keeps getting hit by these unpleasant surprises.”

Until recently, Kamarck noted, the White House didn’t have a high-ranking aide assigned full time to monitoring how programs were being implemented. That’s one of the reasons for the failure of the healthcare website; the engineers foresaw it, but nobody high up was pulling that information out of them.

Bad management alienates even a president’s allies, Kamarck noted.

“His popularity can go down and stay down,” she said. “That’s what happened to Jimmy Carter in the last year of his presidency. That’s what happened to George W. Bush after Hurricane Katrina.”

And now “that’s the narrative about Obama. It’s the narrative even among Democrats. They’re beginning to say, ‘Oh, we love everything he says; we just wish he could get something done.'”

In the case of the VA health system, problems many of us are learning about now have long been evident but never quite got fixed.

“This has been building for 10 or 15 years,” said Phillip E. Carter, an expert on veterans affairs at the Center for a New American Security. He said demographic surges of aging Vietnam vets, plus returning vets from Iraq and Afghanistan, were straining the system.

Even the specific problems of excessive waiting times and bureaucrats manipulating records aren’t new.

The VA knew that some of its medical centers had piled up huge backlogs in patient appointments by 2011. The Government Accountability Office, Congress’ investigative arm, reported in 2012 that VA bureaucrats were fiddling with waiting time records. CNN reported in 2013 that at least six veterans died in South Carolina because of long delays in providing diagnostic tests. Charges of misconduct at the VA medical center in Phoenix, the incident that turned the problem into a scandal, have been percolating through the bureaucracy for more than a year.

So if Obama only learned of the depth of the problems from watching TV, as his spokesman said last week, something is amiss with his administration’s internal communications.

It’s possible to hold out some optimism amid these scandals.

“Every crisis is also an opportunity,” Carter said. “Fixes are available at the VA, and this is the time to put them in place.”

It’s even possible that the White House has learned some management lessons. After the healthcare website crashed last fall, Obama named a seasoned administrator, Jeffrey Zients, to take charge — and seven months later, the health insurance program appears to be working.

And two weeks ago, Obama created a White House post — deputy chief of staff for policy implementation — and filled it with Kristie Canegallo, an aide who worked with Zients on the healthcare crisis. “We have determined we need more senior-level focus on implementation and execution,” White House chief of staff Denis McDonough said in announcing her appointment.

Good call. Too bad it came too late to help some of those vets.

Copyright © 2014, Los Angeles Times

Merger and Acquisition Leads to Monopoly

What if there was just one phone company, one television service provider, and one company owning all the supermarkets? Do you believe that prices would be lower or higher?

This proposed $48 billion merger of AT&T with DirectTV along with the proposed Comcast-Time Warner Cable merger will enable two very large companies to become even bigger. The benefit will be reduced competition for the newly formed businesses. The impact will be higher cost cable and satellite TV service for the public. Unless the public is very vocal these mergers will be approved. The company lobbyists will begin making their rounds to congressional offices starting now. Every congressman needs to be scrutinized before the next election.

AT&T is a relatively small player in its offering called U-Verse television service. Their acquisition of DirectTV will make them a major participant in the TV service business. AT&T claims this will in no way reduce competition. That is the same argument Comcast makes in its proposed purchase of TWC. The consequences are more significant than merely permitting two or three companies dominating the delivery of television services.

There will be less competition and the decisions those companies make will determine the programs you watch.

Interestingly Morningstar, the on-line evaluator of stocks and bonds, does not believe there is any financial or strategic benefit in the AT&T acquisition.
“The biggest benefit to AT&T from this deal would be increased leverage in negotiating with content owners like Disney. By highlighting the fact that other pay television providers need to keep pace with Comcast and putting its own deal forward, AT&T is forcing regulators to consider a world with significantly increased concentration in media distribution.”

Consumer Reports lobbying arm, Consumers Union, says that neither of these consolidations are good for consumers.

Both Federal Communications Commission and Department of Justice must approve this merger. The Washington Times reports that every single member of the Senate Judiciary Committee, holding hearings on the Comcast purchase of TWC has taken money from Comcast.

So if you were betting on the approval of that purchase, what do you believe the outcome will be?

What’s Wrong with Los Angeles?

The answer is simple. Our elected officials take no chances. Their primary objective is re-election.The majority of electorate doesn’t care who holds office as long as it is a Democrat. Thus the city and county continue down the same beaten path.  I am not alone in my opinion.

The mayor started his administration with a bang by discharging department heads that did not meet his performance expectations.   More here.

Racist or Bigot?

Everyone is calling Donald Sterling a racist. I have heard his rants numerous times. I would have called him a bigot. I have heard the words of a bigot. At least I thought those people were (probably still are) bigots.

 

So what’s the difference?

From the American Heritage Dictionary

Racist

1. Believes that race accounts for differences in human character or ability and that a particular race is superior to others.

2. Discrimination or prejudice based on race.

Bigot

One who is strongly partial to one’s own group, religion, race, or politics and is intolerant of those who differ.

Hmm, So when I said to a friend (not anymore) “You are a bigot” after he told me of his hatred for Blacks, Mexicans, and Jews, should I have said you are a racist?

Eric Zorn writing in his Chicago Tribune blog posted this thought:

It’s prejudice when Mr. Smith feels unhappy when Mr. Johnson moves in next door because he doesn’t like Mr. Johnson’s skin color or ethnic identity.

It’s bigotry when Mr. Smith refuses to invite Mr. Johnson into his home or offer him friendly waves of greeting.

It’s racism when Mr. Smith uses threats and intimidation to attempt to drive Mr. Johnson and his family out of the neighborhood.

Without fail, every person I have known that is a bigot denies that he holds any hatred for anyone. Sterling sees nothing wrong with his words or deeds

Donald Sterling is both a bigot and racist.

Los Angeles Union Station Reaches 75

LA Union StationIt was August 1948 when I arrived in Los Angeles. My first view of this city was the parking lot lined with the tall Mexican Fan Palm trees.   Thousands celebrated the 75th anniversary of the iconic Union Station in L.A yesterday. I was there once again.

It’s not the most beautiful building but for many it evokes memories. If nothing else the anniversary celebration provoked a cleaning and polishing of the facility. Recent add-ons to the station have made it a far more attractive site.

Public transportation has received a very big boost in Los Angeles over the past 20 years. This facility has become a significant transit center for that development. Freeways have not provided the transit solution that many believed would be the future for this metropolitan area.

More photos on Los Angeles Photo Gallery link.

Middle Class and Working Class Have No Voice

“Total nonfarm payroll employment rose by 288,000, … the number of unemployed persons, at 9.8 million, decreased by 733,000.” These statements were copied from yesterday’s Employment Situation Summary issued by the U.S. Bureau of Labor Statistics.

The difference of 445,000 are the former workers who have decided to stop looking for work. The issue is not what their source of income will be. The issue for this discussion is the .4% drop in unemployment. At 6.3% the Federal Reserve can now say the goal of 6.5% has been achieved. We can now further reduce our bond buying (quantitative easing) program. The program goal is to keep interest rates low as an aid to business to encourage borrowing.

Did private enterprise respond as desired? It appears business saw the advantage of outsourcing manufacturing to other nations as the preferred business choice.

Congressional actions did not support the Federal Reserve. Rather than imposing taxes on companies that outsource or providing funds to build infrastructure congress did nothing.

Many reading this believe that congress did the right thing by not taking any action. That is the reason our economy is in its current condition.

The rich are happy! The poor? Well, they have no voice.

Comparing the Ming Dynasty to America’s Decline

What the collapse of the Ming Dynasty can tell us about American decline

Everyone likes to compare the U.S. to Rome, but this 16th century superpower is a far more salient comparison

 

By Noah Smith/THE WEEK | March 6, 2014

Broken Flowers – A Really Bad Movie

Broken Flowers Netflix description: “After being dumped by yet another girlfriend, serial bachelor Don vows he’ll be alone forever. But when an anonymous letter informs him he has a 19-year-old son, Don sets out on a cross-country journey to confront his past — and a few old flames.”

This movie stars Bill Murray, a well known and capable actor. Why he agreed to take this role is a mystery to me. He must have needed the money. The movie starts out with an interesting puzzle. Does the protagonist really have a son? Who is the mother? His search for the answer brings no answer to those questions and does bring the viewer to wonder what purpose this movie serves. Nothing is revealed about his past girl friends and nothing is revealed about Don.

My daughter’s boy friend said he thought it is a comedy. I thought think it is a waste of film and talent.

Collusion – The Near Monopolies Control so Much of America’s Private Enterprises

Collusion: Synonyms are conspiracy, complicity, involvement, agreement, knowledge, consent, approval.  Which of those words defines the U.S. congressional responsibility for just five major banks controlling most of this nation’s economy? 

The United States government is a partner in the near monopoly of private enterprises that permeate our society. Don’t believe me? Read on.

Do you suspect there is price fixing in the price of gasoline in the United States? Here is a list of the major companies in the USA.

USA
76 Stations
BP (Arco)
Chevron
Conoco
Exxon
Mobil
Phillips 66
Shell
Texaco

In your neighborhood the prices are never more than a few cents apart.

How difficult would it be for Chevron, Mobil, Shell, and Arco (the stations in my area) to meet discretely on a golf course and agree on the pricing? The answer is it wouldn’t be too hard.

Few companies have a true monopoly in any market. More common are “virtual monopolies” or “near-monopolies” that exist due to geography or brand recognition. When consumers hear the term monopoly, the first thing that comes to mind is often price-fixing. Unfortunately they are correct. Jello Brand gelatin desert has a near monopoly. Intel processor chips had a near monopoly in PC computers. Bill Gates and his immediate inner circle earned an over the top fee for his Office programs. To this day he is still either the richest man in the world or nearly so.

Read more: http://www.businessinsider.com/the-next-7-american-monopolies-2010-11?op=1#ixzz2zgO5D4Lj

During the Senate hearing on Comcast’s takeover of Time Warner Cable, Sen. Al Franken said the cable giant has over 100 lobbyists making its case. That is one lobbyist for every senator. Consumers Union says over 264,000 people have sent messages to congress asking that the merger be stopped. Comcast current share of the cable industry is estimated at 30%. Time Warner Cable current share of the cable industry is estimated at 19%.

The Kroger Co. is a major retail food market company that simply keeps growing larger and larger. The company is based in Cincinnati, Ohio. This is the latest posting on their web site. “We are delighted to welcome Harris Teeter to the Kroger Family of Stores.” That company owns Thumb Stores; Heritage Farms Dairy; HarrisTeeter Supermarkets, Inc. That company has stores in North Carolina, South Carolina, Virginia, Georgia, Tennessee, Florida, Maryland and Delaware. With the exception of Maryland and Delaware, Kroger already has Kroger stores in those states. So whether you shop at Harris Teeter or Kroger you are shopping at the same company. Kroger ownership is widespread under a variety of names: Kroger, Dillons, Fred Meyer, Fry’s, QFC, Ralphs, Food 4 Less, Smith’s, and now Harris Teeter. This is not a complete list. Kroger Co. also approached Safeway about buying part of its operations. Kroger’s share of the entire retail food sales is unknown but the company has the largest share of the U.S. market.

Ticketmaster competitors are nowhere to be found. The company seems to have a lock on all sales of tickets for concerts, live theater, and sporting events. As an Example I logged into the Hollywood Bowl/Los Angeles Phil and found the web site’s basic address is Ticketmaster.com. Their fee is 8% to 10% of the price of the tickets. The only option to avoid the fee is a visit to the box office. There is no alternate sales agent. Ticketmaster had a more or less monopolistic position in the ticketing market after the purchase of its main competitors Ticketron and Live Nation.

LensCrafters is owned by Luxottica Group S.p.A. That company is the world’s largest eyewear company, controlling over 80% of the world’s major eyewear brands. Its best known brands are Ray-Ban, Persol and Oakley. This company was featured in a 60 Minutes program. The company owns

Eyeglasses that are either plastic or wire frames cost almost as much as a computer.

Everyone is a victim! Our elected government is a partner in this crime!