Tuesday, May 28, 2013

Labor big a real heavy sleeper - m.NYPOST.com

Labor big a real heavy sleeper

Union fat cat Mark Rosenthal spends more time sleeping at his desk than organizing labor, a series of damning photos reveals.

The 400-pound president of Local 983 of District Council 37 — the city's largest blue-collar municipal-workers union — often downs a huge meal, then drops into dreamland in the early afternoon, members of the union's executive board told The Post.

IT'S A DREAM JOB: Mark Rosenthal, who pulls in $156,000 a year as head of Local 983 of District Council 37, nods off at his desk during one of a series of postlunch naps that have outraged members of the union's executive board.

"He eats lunch when he arrives at work at 2 p.m. Then, like clockwork, he goes to sleep with a cup of soda on the table and the straw in it," said Marvin Robbins, a union vice president.

"Then he wakes up, looks at his watch and says, 'I have to get out before the traffic gets bad.' He's usually out by 4 p.m. after being at the office two hours."

Rosenthal is a former Parks Department employee who rose to power campaigning to rid the union of corruption in the late 1990s.

He last made embarrassing headlines in 2009, when he inspired a City Council bill requiring jumbo-size ambulances for morbidly obese patients after he had a stroke at City Hall.

Since then, he hasn't been making much of an effort to give the city's ambulances a break and slim down. Union officials say he racks up $1,400 in monthly food bills on the union dime.

Much of the 5-foot-7, 400-plus-pound Rosenthal's food tabs are for catered union events and meals he writes off as "union business," board members claim.

They say he significantly overorders at eateries like Dallas BBQ, the Stage Door Deli and Pine Restaurant in The Bronx, a hangout for local politicians, and takes the extra food back to his Bronxdale apartment.

"He's always walking off with a doggie bag or extra boxes of food," said another executive board member.

Rosenthal, who earns $156,000 annually, yesterday denied being a free spender— and insisted he works "12-to-14-hour days."

He says the allegations are "part of a smear campaign" by a faction trying to get another Local 983 vice president, Joseph Puleo, elected president in a June 5 showdown.

He said it's normal for executives to take "power naps."

He also blamed his meetings with the sandman on the effects of pain medication he takes for backaches he has suffered since he fell through a chair at a McDonald's last year.

"The chair broke because I'm big," Rosenthal said.

"I'm 60 years old, so if I eat during my lunch hour and take a little medication, can't I close my eyes?" he said outside his apartment complex. "Is it so outrageous?"

Rosenthal is also under fire from the union's executive board for allowing lawyer Arthur Schwartz to allegedly rack up an average of $12,000 a month in union legal fees for years despite being on a $5,500 monthly retainer, board members said.

But Schwartz claims he has submitted only one monthly bill over $10,000 in 15 years representing the union and averages about $7,000 per month in fees.

APRIL 2, 2013

The executive board on May 15 voted to fire Schwartz anyway — and also to pull Rosenthal's union car.

Board members said they were furious enough to fire Schwartz because he pursued a lawsuit on Rosenthal's behalf aimed at changing the makeup of the union's election committee after it nominated Puleo as a candidate for president on May 7.

Rosenthal responded to Schwartz's firing by filing another suit days later in Manhattan Supreme Court, claiming the May 15 meeting occurred without his approval.

The suit also accuses executive board members of using union resources to sway the election in Puleo's favor.

"Mr. Puleo and his cohorts have basically seized control without having won the election," the suit says.

"Not only that, [but] they have [also] assigned legal work to attorneys, including to Mr. Puleo's campaign lawyer."

MARCH 27, 2012

Puleo called Rosenthal's allegations "absurd," adding, "He's the one using the union's resources to sue members in good standing."

The case has since been moved to a federal court in Manhattan with a hearing set for today.

The union represents 3,000 workers — mostly Parks Department peace officers and maintenance workers and NYPD tow-truck operators and other traffic agents that are among the lowest-paid city workers.

But they still fork over $1,080 in annual union dues that help fund Rosenthal's salary and perks.

Rosenthal has headed the union since 1998, when he won an election under the platform of ridding the union of corruption and alleged mob ties. At the time, he called the union a "cesspool."

Some members say he was a strong labor advocate for the union in his early years, but his questionable spending and sleeping habits — and alleged lack of attention to union issues — in recent years led to Puleo's campaign.

He has also ruled the union with little opposition in part because he and Schwartz have strong political connections at City Hall, so members say they were afraid to go up against them until now.

"There was always the fear that he'd use his power to retaliate against anyone who spoke up," Puleo said.

"He always likes to say he's a big supporter of Mayor Bloomberg and the fact that the mayor called him to thank him for his support when he was elected.

"I would love to see the mayor's face if he saw the big sodas that he likes to drink. It's kind of ironic."

Additional reporting by Lorena Mongelli


MAY 16. 2012

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Sunday, May 26, 2013

Prepare to Start Making Things Again - By Charles R. Morris | Foreign Policy

Prepare to Start Making Things Again

China's march to global dominance in manufacturing is slowing down. By Chinese standards, its official claim of 14.7 percent year-to-year growth in exports for April is relatively lackluster -- and the physical trade flow data suggest that it may be overstated by as much as 60 percent. The image of the robotic "blue ant" Chinese worker-hordes is long out of date. The country's spectacular economic growth has vaulted large segments of its population into the middle class, and they want better pay and benefits, shorter work weeks, and other perquisites that their Western peers enjoy.

As China's momentum slips, U.S. manufacturing fortunes are on an upswing. U.S. corporations made unusually high profits in the wake of the Great Crash: During the weak recovery years of 2010-2012, after-tax corporate profits were 43 percent higher than during the stronger recovery of 2003-2005, according to my calculations. Workers took the brunt of the decline, while corporations invested their savings in a brutal restructuring of production operations. Cruel as that was, the United States has emerged from the crash as one of the world's most cost-competitive manufacturers.

According to the Boston Consulting Group (BCG), Chinese worker productivity is still growing at about 8 percent a year, an extraordinary rate -- but worker compensation is growing more than twice as fast. From 2000 to 2010, average wages in south China's Yangtze delta, a manufacturing hotbed, jumped from $0.72 an hour to $8.62. Factoring in worker output, land costs, and the rising costs of long-distance shipping (as well as the relative lack of corruption), U.S. manufacturing is approaching competitive parity with China. BCG also estimates that the United States can undersell firms in Japan and Europe by as much as 25 to 45 percent, and that it may also have the world's best trade logistics capabilities.

The hidden costs of outsourcing often loom the largest, but they don't show up on profit statements. For example, when General Electric, a pioneer of offshoring among U.S. flagship companies, began moving its multi-billion dollar appliance manufacturing back from China as costs converged, they discovered that the lack of contact between their design and production teams had caused their designs to stagnate. The company realized a 20 percent overall savings on their first "reshored" appliance, a water heater, just by re-engineering it to reduce material costs and labor inputs. Onshore production also makes it easier to keep up with today's just-in-time delivery mandates and ever-more-rapid product cycles. (And like all U.S. companies, GE has become very wary of the Chinese propensity to knock off market-leading product designs.)

The data supporting the manufacturing recovery story are still mostly anecdotal, but the anecdotes are coming in floods, not as straws in the wind. Recent surveys show that up to a fourth of U.S. companies offshoring in low-income countries have been moving some or all of their production back home, while a third are researching the question. Meanwhile, at home, factory automation keeps labor-force costs in check, and U.S. manufacturing unions are far less militant than they once were. Caterpillar, Ford, and Whirlpool have been reshoring major product lines as well, and other major manufacturers will likely follow.

Meanwhile, an impressive list of foreign companies is relocating factories to the United States: Samsung is building a semiconductor plant in Texas; Airbus will make planes in Alabama; Toyota is outsourcing production of minivans to Indiana for export to Asia. Rolls-Royce has been expanding its U.S. airplane engine parts production operations to service its global customers.

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Thursday, May 23, 2013

Fwd: Benghazi: Demand the Truth

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Begin forwarded message:

From: Jerry Villella <jerryvillella@yahoo.com>
Date: May 23, 2013, 4:54:25 AM CDT
To: Jerry Villella <jerryvillella@yahoo.com>
Subject: Benghazi: Demand the Truth

Check out this video on YouTube:


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Thursday, May 16, 2013

Men who are physically strong are more likely to have right wing political views | Mail Online

Found this interesting link on the Drudge Report:

Men who are physically strong are more likely to have right wing political views | Mail Online


The Official Drudge Report iPhone, iPad or iPod Touch app available in the iTunes App Store:

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Tuesday, May 7, 2013

Unemployment in the Age of Capital Abundance | Macrofugue Analytics

Unemployment in the Age of Capital Abundance

I – The Nominal and the Real

In economics, there are two kinds of problems:  real problems and nominal problems.

Moai_Rano_rarakuThe deforestation on Easter Island destroyed most of the Rapa Nui.  When it was necessary to leave the island and start new lives in a new land with an environment able to support their people, there were not enough large trees left to build ocean-worthy vessels.  Their population declined to 15-20% of their peak population within a century.

This is an example of a real problem. A real problem is a lack of natural resources, capital goods, land or labour, or when any combination of these factors of production sum to an inadequate value to produce enough to maintain (or better) the general welfare of a people.

A nominal problem is one which is contained in the abstract.  They can result from frictions in capital structure, uneven distribution of income, or simply in the collective choices of participants in an economy.

The wealth contained in an economy is its capital stock:  our oil fields, forests, farms, houses, offices, cars, computers, factories, data centers, software and construction equipment.  Our potential is richly governed by the quantity of our workers, the durability of their work ethos coupled with their experience and education.  This is the real economy.

Capital consists of raw materials, instruments of labour, and means of subsistence of all kinds, which are employed in producing new raw materials, new instruments, and new means of subsistence. -Wage Labour & Capital (Marx, 1847)

II – Marginal Capital Allocation

An economy with inadequate capital has firm prices and high capital returns.  An economy with a glut of capital has soft prices and low capital returns.

Economic growth is the expansion of capital – and subsequent expansion of capital utilization. Investment creates capital. Capital is the accumulated labour directed by the formation of financial capital.  This capital, or accumulated labour, represents capacity to sustain consumption.

High (low) capital returns don't necessarily equate to high (low) capital prices.  An outsized capital return likely indicates that additional investment will be induced, which could compete to drive the price of its output down.

Growth in employment hinges on investment.  The utilisation of existing capital maintains the stability of existing employment, but new employment requires new investment.  This is demonstrated with Figure 1, showing a very strong relationship between the health of the employment market and Investment net of Capital Consumption as a fraction of GDP.

Figure 1: Variations in Net Investment explain 92% of unemployment from 1990-on.

Figure 1: Variations in Net Investment explain 92% of unemployment from 1990-on.

Unemployment is largely a result of rentierism, which we've defined as the behavior of collecting economic rent from existing assets instead of creating new ones. The act of collecting rent is a preference executed on marginal free cash flow dollars, principally by the corporate sector.  Corporate Management have three options, with increasingly expected yield requirements:

  1. Hold it as cash:  this is a liquidity preference, which is pro-cyclical, and becomes decreasingly attractive as the embedded put option in cash becomes too expensive to hold while it decays, thus becoming less competitive with capital accumulation options that have a positive real expectancy
  2. Purchase existing capital:  this can be either the purchase of used or previously existing fixed capital, such as machinery or real estate, or capital assets, including a firm's own stock
  3. Invest in new capital:  building a new factory or drilling a new oil well

III – The Marginal Rentier Opportunity Curve

J. M. Keynes (and Irving Fisher before him) furnish us with the Marginal Efficiency of Capital as the excess return of a piece of capital over its supply price.  The supply price can be one of two values:  the market price (buying used or existing capital) or replacement cost (new net investment).

I define the marginal efficiency of capital as being equal to that rate of discount which would make the present value of the series of annuities given by the returns expected from the capital-asset during its life just equal to its supply price. This gives us the marginal efficiencies of particular types of capital-assets. The greatest of these marginal efficiencies can then be regarded as the marginal efficiency of capital in general. The reader should note that the marginal efficiency of capital is here defined in terms of the expectation of yield and of the current supply price of the capital-asset. It depends on the rate of return expected to be obtainable on money if it were invested in a newly produced asset; not on the historical result of what an investment has yielded on its original cost if we look back on its record after its life is over. -General Theory of Employment, Interest & Money (Keynes, 1933)

There in fact exist marginal efficiencies between all investment opportunities.

Figure 2: The Marginal Rentier Opportunity Curve outlines the yields on principal investment opportunities available for the marginal cash-flow dollar

Figure 2: The Marginal Rentier Opportunity Curve outlines the yields on principal investment opportunities available for the marginal cash-flow dollar

I propose, approximately illustrated in Figure 2,  the Marginal Rentier Opportunity Curve, which offers a comparison between the principal investment opportunities available. The current yield is not the same as the Expected Return.  We can, however, tease out the relative expected returns by spreading spots on this curve.

The investment opportunity set has ascending and encapsulating risk premiums:  Attractiveness of new investment is measured against the sum of all premiums between it and the risk-free rate.

Thus, I further propose:  The price of capital is the Net Present Value of Risk-adjusted Expected Return discounted from the Marginal Rentier Opportunity

 IV – Used Capital Competition

So far, I have postulated:

  1. The wealth of an economy, and the capacity for its income, is contained in the accumulated labour, or the capital stock, of its people.
  2. Economic growth, measured by real income, is the accumulation of labour and subsequent utilisation through net new investment.
  3. The marginal investment dollar purchases either existing capital assets, or the creation of new capital assets through net new investment.
  4. Marginal investment dollars that are not allocated into net new investment cause a reduction of income to the household sector, and increase unemployment.

Assuming the aforementioned postulates true, it can be observed that the rational business manager will, perhaps simultaneously:

  1. Increase liabilities from portion of the Marginal Rentier Opportunity Curve with the lowest expected return.
  2. Increase assets from the portion of the Marginal Rentier Opportunity Curve with the highest expected return.

This necessarily implies that, if the risk-adjusted expected return is not highest in net new investment, the business manager will instead invest the marginal dollar into existing capital. If the price of capital is the Net Present Value of Risk-adjusted Expected Return discounted from the Marginal Rentier Opportunity, and the business manager finds the most attractive investment opportunities in the purchase of existing capital, we can conclude:  the price of existing capital must be bid up high enough in order for new capital to be competitive.

V – Jobless Recoveries

Figure 6: The relationship between Net investment as % of GDP as 12-month payroll growth

Figure 3: The relationship between Net investment as % of GDP as 12-month payroll growth

The significance of existing capital available cheaply to allocators is that, until existing capital is expensive enough to make new capital competitive, net new investment will be muted, and so too will employment growth (figure 3).

The common understanding is stocks lead the economy at economic turning points.  This is not always true.  Coming out of the .com bust, the economy bottomed in 2001, more than a year before S&P 500 finally did.  The explanation is expectations lead the economy, but I find this argument runs counter my observations in expectations around cycle turns.  I offer an alternative: that which causes equities to (typically) bottom is also what causes the economy to recover.

The recovery after the .com bust recession was termed a jobless recovery, and for good reason:  jobs took even longer than the stock market to bottom!

Figure 3: The jobless recovery following the .com bust

Figure 4: The jobless recovery following the .com bust

Using our understanding of job-growth as net-investment driven, we can clearly see why there were no jobs:  there was no investment.  The next observation we can make from Figure 4 is the lack of investment, even years after the recovery, until after the S&P 500 had bottomed.  Finally, in later 2003, the Net Investment is elastic to the upward movement in the S&P 500.

For this argument, we approximate the S&P 500 as the aggregate price-level of existing capital.

The inference is that the jobless recovery of late 2001-2003 was the result of a net investment-less recovery, which was probably the result of existing capital being available more cheaply.

We can see the same pattern emerge, as demonstrated by Figure 4, in the present recovery.

Figure 4: The second jobless recovery

Figure 5: The second jobless recovery

Perhaps most incredibly, Net Investment went negative for the first time in history of the series going back to 1947 during The Great Recession (figure 6).  Our capital stock was depreciating at a greater rate than we were replacing it.

Figure 5: The long-run relationship between Net Investment and growth in employment

Figure 6: The long-run relationship between Net Investment and growth in employment

The explanation that jobless recoveries result from a scarcity of net-investment because existing capital is too cheap for new capital creation to be competitive enjoys intuitive sense, as well some recent historical evidence.

VI – Contemporary Interpretation

If the price of existing capital has been rising, and Net Investment has been muted, we conclude that the price of creating new capital is not competitive with existing capital.

The great irony is that, the richer the country has become, there is less work to be done, which leaves workers with less income.  This is our great nominal problem.

Figure 7: Labour force and population growth projections through 2050

Figure 7: Labour force and population growth projections through 2050

Figure 7: Labour force and Private Non-Residential Fixed Investment growth

Figure 7: Labour force and Private Non-Residential Fixed Investment growth

The CBO and BLS forecast around 0.7% annual labour force growth this decade, and just 0.5% in the 2020s.  This means the growth of future requirements for fixed capital and accumulated labour that support workers — such as office buildings or automobiles — will be subdued, even more so than the production of goods consumed by all demographic groups.

Combined with productivity efficiencies in the Internet age that provide a declining Real Capital Intensity of Economic Output, we require less capital formation.  This potentially explains why the price of real capital had been below its previous peak for so long, and consequently why net investment (and employment growth by proxy) has been limited.

With the S&P 500 (our approximate aggregate capital market value) closing once again near record highs, it seems likely that new investment will be more attractive.

Perhaps Conor Sen put it best:  Wringing the risk premia out of existing capital is a necessary precondition for new capital formation (and hiring!).

I hope and believe we are there, and maybe we've learnt something new about the nature of jobless recoveries.

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Saturday, May 4, 2013

Physical by smartphone becoming real possibility

Physical by smartphone becoming real possibility

WASHINGTON (AP) — It's not a "Star Trek" tricorder, but by hooking a variety of gadgets onto a smartphone you could almost get a complete physical — without the paper gown or even a visit to the doctor's office.

Blood pressure? Just plug the arm cuff into the phone for a quick reading.

Heart OK? Put your fingers in the right spot, and the squiggly rhythm of an EKG appears on the phone's screen.

Plug in a few more devices and you could have photos of your eardrum (Look, no infection!) and the back of your eye, listen to your heartbeat, chart your lung function, even get a sonogram.

If this sounds like a little too much DIY medical care, well, the idea isn't to self-diagnose with Dr. iPhone. But companies are rapidly developing miniature medical devices that tap the power of the ubiquitous smartphone in hopes of changing how people monitor their own health.

"We wanted to make sure they have all the right tools available in their pocket" is how Joseph Flaherty of AgaMatrix describes his company's tiny glucose monitor. Diabetics can plug the iBGStar into the bottom of an iPhone and check blood sugar on the go without carrying an extra device.

This mobile medicine also might help doctors care for patients in new ways. In March, prominent San Diego cardiologist Eric Topol tweeted "no emergency landing req'd" when he used his smartphone EKG to diagnose a distressing but not immediately dangerous irregular heartbeat in a fellow airplane passenger at 30,000 feet.

And the University of California, San Francisco, hopes to enroll a staggering 1 million people in its Health eHeart Study to see whether using mobile technology, including smartphone tracking of people's heart rate and blood pressure, could help treat and prevent cardiovascular disease.

The question: Do smartphone devices really work well enough for the average patient and primary care doctor to dive in, or are early adopters just going for the cool factor? Many of the tools cost $100 to $200, there's little public sales information yet and it's not clear how insurers will handle the fledgling trend.

"Technology sometimes evolves faster than we're ready for it," cautioned Dr. Glen Stream of the American Academy of Family Physicians. "We're recognizing more and more that not all care needs to be delivered face to face," but only if people measure the right things and have a relationship with a doctor to help make good use of the findings, he stressed.

Addressing a recent TEDMED conference in Washington, Dr. Susan Desmond-Hellmann, UCSF's chancellor, put the challenge this way: "How does mobile monitoring become something more than a toy or something interesting? How does it connect to how I'm cared for by my caregiver?"

About 300 doctors, health policy wonks and others attending that high-tech meeting received what was dubbed a "smartphone physical" from medical students using 10 of the latest devices. The Food and Drug Administration has approved a number of the gadgets for sale; others are experimental prototypes gathered for the demonstration by Nurture by Steelcase and the doctor website Medgadget.

"It's going to be our generation that adopts most of these," noted Shiv Gaglani, a Johns Hopkins medical student who helped organize the project.

The FDA cites industry estimates that 500 million smartphone users worldwide will use some type of health app by 2015. Today's apps mostly are educational tools, digital health diaries or reminders and fitness sensors. The new trend is toward more sophisticated medical apps, some that work with plug-in devices, that provide information a doctor might find useful.

Some of the devices sell by prescription or on drugstore shelves, while others like the diabetes monitor and blood pressure cuff have entered a new venue for medicine — the Apple store.

Simplicity is part of the idea. Take the AliveCor Heart Monitor. Snap it on like a smartphone case, place fingers on the sensors — no sticky wires on the chest — and you've got an EKG recording in 30 seconds. The FDA approved sale of the $199 device in December for doctors to use in exams or to prescribe for patients to use on themselves.

It doesn't measure as much as a full-scale EKG, and patients must email the recording to a doctor for analysis. But heart patients frequently experience palpitations that have ended by the time they reach a cardiologist — and emailing an on-the-spot EKG reading might help the doctor figure out what happened, said AliveCor co-founder Dr. Dave Albert.

"This is a brand-new technology. We're trying to understand how people will use it," said Albert, whose company also is seeking FDA permission to sell the device over the counter.

Welch Allyn's iExaminer taps the smartphone's camera to photograph deep inside the eye — the orange view of the retina filling the phone's screen.

Similarly, CellScope Inc. is developing an otoscope — that magnifier doctors use to peer into the ear — that can snap a photo of the eardrum. It's not for sale yet, but might parents one day email that kind of picture to the pediatrician before deciding whether Johnny needs an office visit?

"It was great to see it on the phone, rather than the pinpoints we get to see" through a traditional scope, said Dr. Bertina Yen, a Los Angeles internist-turned-health IT specialist. She turned the tables during her smartphone physical, taking over some of the equipment to try it out herself.

And University of Washington researchers are testing a way to measure lung function in people with asthma or emphysema as they blow onto the phone and it captures the sound. Usually patients blow into special machines at the doctor's office, while a use-anywhere version might help someone spot early signs of worsening before they see a doctor.

Insurers are studying what smartphone technology to pay for. For example, health care giant Kaiser Permanente is about to begin a project in Georgia to sell the iBGStar alongside other diabetes monitors in its on-site pharmacies. The project will determine whether patients like the smartphone monitor, if it improves care — and if so, whether the readings should beam into patients' electronic health records, in Georgia and in other Kaiser regions.

But ultimately these devices may have a bigger role in developing countries, where full-size medical equipment is in short supply but smartphones are becoming common. Even in rural parts of the U.S. it can take hours to drive to a specialist, while a primary care physician might quickly email that specialist a photo of, say, a diseased retina first to see whether the trip's really necessary.

"These tools make diagnosis at a distance much easier," said Dr. Nicholas Genes, an emergency medicine professor at New York's Mount Sinai School of Medicine, who helped with TEDMED's smartphone physical.

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