Links of the Day - Economics

If you read no other link, scroll down and read the last one.

Are Jobs obsolete?

"Our problem is not that we don't have enough stuff -- it's that we don't have enough ways for people to work and prove that they deserve this stuff." Unconventional story will give you a new way of looking at things.

Death Star Procurement

This symptom probably applies to the majority of Air Force procurement projects. More Air Force officers can fly Powerpoint than fly an aircraft (sad but true).

Labor Union protest in South Korean shipyard

US Shipbuilding has biggest multiplyer effect amongst all government spending

...Due to having the largest portion of their supply chain within the US.

NYT: Unemployment now higher in South than Rust Belt

Gov't regulation saves Alaskan crabfishing

So says one of the stars of "Deadliest Catch"

News from The Associated Press

German executive arrested under Alabama's Immigration laws. That'll attract foreign investment...

Outsize Severance Continues for Executives, Even After Failed Tenures - NYTimes.com

A free market, until it's their neck in the noose.

Nabors Drilling Exec gets fat payday

Isenberg's payment would exceed Nabors' third-quarter profit of $74.3 million. A horrible executive gets a gigantic payday, against the wishes of the stockholders.

Big Banks Plead with Customers Not to Move Their Money

Banks are unpopular with #OWS'ers and conservatives.

The Consumer is Dead

With Christmas shopping around the corner, long live the Consumer?

The China Money Report » Chinese Fund Managers Sentenced to Death after Cheating Investors out of 1 Billion USD

And people accuse the #OWS crowd of hating bankers...

Who needs unionized firefighters when there's slave labor!

Can you imagine letting prisoners save your house? Coming to a budget-strapped city near you!

World Power Again Swings back to America

Talks about 80's US/Japan fall/rise trend that ended up with a lot of journalists with egg on the face. One key factor: a weaker dollar helps out US manufacturers. There were also some interesting discussions on Twitter about how NOLA-area merchants LOVED it when the dollar was weaker because they had European tourists spending like mad. Now, with the Euro in the gutter, those tourists are gone.

3 Ways Of Looking At Manufacturing In America : Planet Money : NPR

Fascinating article

It's the Economy, Dummkopf! | Business | Vanity Fair

Michael Lewis is the best writer out there when it comes to the economy. He covers the German/Greek debt crisis from an unusual perspective.

The Decline of Manufacturing in America: A Case Study « naked capitalism

H/T @muffuletta: "Read this then tell me who has done more damage to the country, Al-Qaeda or business schools"

It's the Inequality, Stupid | Mother Jones

Statistics-rich article.

Only Advanced-Degree Holders See Wage Gains - Real Time Economics - WSJ

Over the past decade, on average, wages have risen only for Americans with graduate degrees

Report: Rich-poor gap growing - Mackenzie Weinger - POLITICO.com

50% of US workers made less than $26,364 last year

The faces of poverty

A sobering read.

Obama Signs Patent ‘Reform’ Bill — ‘Crustless Sandwich’ Still Patented | Threat Level | Wired.com

Information Dissemination: US Launches a WTO Nuke Towards China's Great Firewall

Now THIS is an interesting monkey wrench.

The Economist on Student Loans

Linked to by LGM.

Losing the HP Way

"American firms have been laying-off their engineering staffs for years. In today’s world of MBA-managed companies, R&D is perceived as not being a good use of money." Horrifying.

Unions win a battle with Verizon

Recently, 45,000 unionized electrical workers went on strike against Verizon. The two main points of contention were healthcare costs and pay fairness for the same work. On the first issue, Verizon wanted to force the workers to pay hundreds more per month for the healthcare package (shifting the burden from mostly Verizon to mostly worker). The second issue was that linemen in the landline-side of the business would be forced to take an even higher hike than the cellphone-side of the business. The union argued 'equal pay for equal work' (both sets of linemen do about the same thing, just one unit happens to be more profitable now). Here's an overview article that explains more.

I takes some real balls to go on strike when unemployment is ~10%, but it looks like the union came out on top.

Here's one incident that caught my attention throughout the whole flap: Verizon accused the strikers of conducting acts of sabotage. They even offered a $50,000 reward for proof. Now, charges of sabotage are not uncommon and it's not unheard of for the occasional striker to go off the reservation, but so far, I can't find one time Verizon paid out on their reward and I think I know why.

The striking workers were electrical workers. Guys that deal with high voltage and sensitive electronics. There was also an enormous number that walked out all at once. You can't just take any dopehead off the street and send them to work. They'll electrocute themselves, take down your network, and then you'll need a new network (and a new worker). It looks, though, like that's exactly what Verizon did: Verizon uses inexperienced worker to fill in. Note that the NRC used to explicitly ban any manufacturer of nuclear powerplant equipment from providing equipment to plants built by "scab" workers.

What's really interesting is there's lots of videos out there of the replacement workers screwing things up (with IBEW guys snickering in the background):

Verizon (replacement) workers blow transformer while striker hassles them

One more related note: Has anyone found Obama's comfortable shoes?

Given some recent events, maybe these guys are just helping him out by going on their own search for his comfy shoes.

Time to kill the Jones Act?

Recently I've seen a spurt of articles like this: Is the Jones Act lost at sea? and FOX NEWS: Why won't Obama waive the Jones Act?. One of the talking points in a lot of the articles is that oil spill response vessels are being kept away because of the Jones Act, despite specific provisions exempting vessels responding to an oil spill.

That's in part because of a specific exemption in the act that can allow for the use of foreign "oil spill response vessels," said H. Clayton Cook, a Washington attorney and expert on the Jones Act.

"That takes care of your skimmers and your oil spill vessels," he said.

Is the Jones Act, on balance, a good thing or not? Is it protectionist or is it a vital matter of national security? There's way too many facets of such a large law, but I'll talk about the main thrust of the Jones Act (maintaining domestic merchant marine and shipbuilding force).

The Merchant Marine Act of 1920 was authored by Wesley L. Jones (R- Washington) and has been nicknamed the Jones Act ever since. Note that the act has also been revised several times, with large changes made in 1970 and 2006. Here's the preamble to the Jones Act that more or less goes through its purpose and intent:

It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine, and, in so far as may not be inconsistent with the express provisions of this Act, the Secretary of Transportation shall, in the disposition of vessels and shipping property as hereinafter provided, in the making of rules and regulations, and in the administration of the shipping laws keep always in view this purpose and object as the primary end to be attained.

I've read a few things that have led me to the conclusion that the main thrust of the Jones Act is a good thing (although there's lots of subsets that could probably use a re-write). A couple more things to throw out there:
* All shipbuilding tends to be overbuilt. From Wikipedia's Shipbuilding page: "Historically, the industry has suffered from the absence of global rules and a tendency towards (state-supported) over-investment due to the fact that shipyards offer a wide range of technologies, employ a significant number of workers, and generate foreign currency income (as the shipbuilding market is both global and dollar-based)."
* The purpose of the Jones Act isn't about commerce, so citing examples how much it costs consumers isn't the point. If we let, say, China become THE global shipbuilding power and we have a war (or, more likely, a naval-based trade skirmish) it won't do any good to try and contract with Chinese shipyards to build vessels for the navy. Remember, by definition, the in-place warship building capability is overwhelmed.
* Big multinational companies are the ones pushing the hardest for killing the Jones Act, but lots of local shipbuilding companies are terrified of doing away with it. Aker Shipyards in Philadelphia has a page about the Jones Act. New Orleans City Business had a great article about the Jones Act a while ago where they interviewed reps from local shipyards and service companies who all stated they would be put out of business if foreign companies, with looser engineering, labor, and pollution laws were allowed to come in and compete on their home turf, meanwhile their countries have similar protectionist laws in place the prevent them from competing in foreign lands. The companies interviewed (going off memory; subscription required for City Biz site) included Bollinger, Houma Industries, Hornbeck, and Chouset Offshore.

Time to kill the Jones Act? Probably not. If there's a specific problem with it, rewrite that part of the law. Otherwise, leave some fat in the system, because it's way too easy to 'lean' your way to disaster.

Anyway, if anyone has any specific experience with the Jones Act, I'd love to hear it.

UPDATE- Even RigZone calls the Jones Act a red herring, but they fault the USCG for not seizing control of the spill response (non-wellhead intervention) -side of the Macondo Blowout.