Links 7/2/10

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‘Sea monster’ whale fossil unearthed BBC

Canadian, Please YouTube (hat tip Marshall Auerback)

On Average, Charter Schools Are About Average Matt Yglesias

Factory Jobs Return, but Employers Find Skills Shortage New York Times. Notice the somewhat bizarre stand of employers. I can seem them upset at not finding workers with sufficient math skills; that’s an educational issue. But they are also caviling about not finding workers who can “can operate sophisticated computerized machinery, follow complex blueprints.” Is this REALLY a workforce issue, or an unwillingness of employers to provide on the job training, which used to be the norm? Having said that, a separate issue is the abysmal failure of our educational system, particularly in its indifference to vocational training.

‘One in ten’ UK graduates unemployed BBC

The Little, but Real, Effects of Unemployment Mike Konczal

Strategies for “Success” in Afghanistan Ann Jones, TomDispatch

BP’s Gulf Intercept Well Ahead of Schedule With 600 Feet to Go Bloomberg. Encouraging, but they need to hit an itty bitty target for the well to work.

France Calls Google a Monopoly New York Times

Fed Made Taxpayers Junk-Bond Buyers Without Congress Knowing Bloomberg

Late Change Sparks Outcry Over Finance-Overhaul Bill Wall Street Journal. So tell me why, exactly, corporate users should get away with not putting up reasonable margin on derivatives contracts. And the Journal fails to add that most large corporations treat Treasury as a profit center. In other words, these companies do more than just hedge.

ECB avoids disruption as banks repay funds Financial Times

As the EU squares up to bankers and their bonuses, where does that leave the City? Telegraph (hat tip reader Swedish Lex)

Davidowitz: Credit Crisis “A Gigantic Ponzi Scheme, Lies And Fraud” Ed Harrison

Cash calls expected as Europe’s banks face tests Financial Times

Early warning indicators and the global crisis: New evidence Jeffrey Frankel and George Saravelos Vox EU

Habitat For Humanity Among Top U.S. Homebuilders Huffington Post

Myths of Austerity Paul Krugman

Middle class families face a triple whammy Edmund Conway, Financial Times (hat tip reader Swedish Lex)

Antidote du jour:

Picture 10

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  1. Neil D

    On worker training: Having worked in manufacturing for the last 20+ years, I think most successful college graduates don’t grasp how truly lazy and incompetent the average American really is. It really is hard to find good help anymore.

    1. Dustrialist

      This is why Neil, we need to dock their pay for their laziness and incompetence until they realize that unless they improve, they work for us for free. No, we need to make them pay us for the privilege of being supervised by us.

    2. Francois T

      Please, describe what would be a “good help”.

      Seriously! I’m interested in reading your take on that.

      1. Dustrialist

        Good help:

        *does an outstanding job for less than a dollar an hour with no benefits at jobs that are difficult for the most highly-skilled people with doctorates
        *works tirelessly for their employer at least 12 hours a day
        *is on call to handle whatever crops up, during the other hours
        *doesn’t have any obligations to family or friends, and importantly has no health or psychological problems
        *doesn’t ask for raises or overtime pay
        *outstanding oral and verbal communication skills
        *has a “yes, sir” attitude towards everything
        *doesn’t complain about dangerous and unpleasant working-conditions
        *doesn’t complain about screw-ups on the part of the company
        for example, short-changing them on their paycheck
        *never questions their boss or creates any problems
        *agrees to accept personal liability for all of their mistakes
        *buys all their food and necessitites from the company store
        *breaks up union organizing and always sides with management
        *assigns rights to all of their innovations (even ones made on personal time) to the company
        *when laid off, decides to enter another line of work to avoid competing with their old company
        *is physically attractive and smells good

        I think I’ve touched on the main points.

        1. NOTaREALmerican

          Sounds like what most of the Republican voting peasants that I’ve been working with for the last 30+ years have been saying all along. (To tell ya the truth tho, they are really quiet now. The dumbasses from all the “isms” are scared).

    3. Neil D

      Yes – my comment was flip, harsh, and a gross generalization. Standard fare for the blogger set, but for those who were offended, mea maxima culpa.

      I cannot explain the lack of qualified applicants for the types of jobs in the NY Times article. Poor education, high expectations, or lack of ambition? Low pay is a problem, but US manufacturers, like it or not, have to compete with overseas low cost labor. It is a fact of business life no matter how much we wish it weren’t. Those who can afford to go to college might not be satisfied with factory jobs paying 40 or 50K. Those who can’t afford collge aren’t qualified for many of these jobs – with or without training.

      We can blame Wal-Mart and the like, but ultimately we have not taken care to maintain our industrial base. We demand cheap manufactured goods, cheap prescription drugs, and ever increasing stock prices in our 401(k).

      Do our businesses expect to make too much money? Do we demand constant profit growth at the expense of good paying jobs for Americans? Have we ignored the problem of high school drop outs? Yes to all these questions.

      1. Lyle

        The NY Times article raised an interesting point. The companies problem was caused by worker candidates not passing a 9th grade math and english test. That type of issue is not one a company should pay for training. Perhaps if you file for unemployment you should take a test to see your level in these skills and be assigned to full time remedial classes if you don’t reach the desired level until you reach it. (It would qualify as looking for a job for unemployment purposes).
        Training for specific skills is an employeer responsiblity but training for general math and communication skills is not the responsiblity of the employeer.

    4. gordon

      It’s hard to preach virtue when vice is so well and so obviously rewarded. No problem getting people to work on Wall St.

  2. Doc at the Radar Station

    Yves: “…Is this REALLY a workforce issue, or an unwillingness of employers to provide on the job training, which used to be the norm?…”

    Wow, have you ever hit the nail on the head! I agree strongly with your statement. I would also add that the distorted shift from production to consumption over the last 20 years has “maltrained” a huge swath of the workforce and that is certainly contributing. A shop floor (and associated office work) is VERY different from working at a insurance company, a real estate firm, or in retailing/shipping. But, to get back to your original comment here… Employers used to take a lot of time and more importantly, pull other people away from their jobs, to get you trained properly, well because… they kind of expected your job might be a relatively *permanent* one for starters, and they wanted to make sure you understood it properly! I also think the computerization of the workplace has contributed to this problem as well. In order to deal with it, you need to *think* like a software programmer to work with the new “tools”-a lot of it is very left-brained and counter-intuitive. I think this is the source of a lot of “mistakes” that you see people making more and more frequently whether in production or service jobs. The workplace is also full of a lot more distractions than it used to be as a result. The vocational schools try and there are some good teachers out there, but a lot of the schools function in essence as diploma mills with a lot of grade inflation. I think European style apprenticeships would be a big improvement IMO.

    1. Dustrialist

      The solution is both better training, lower wages, and increased authority for Employers to discipline and punish their “independent contractors.” Also it would be nice to see a return of penal servitude and chain gangs; after all, it built the railways.

      1. gordon

        I thought Chinese coolies built the US railways. Or was that just the Union Pacific?

    2. KJMClark

      Minor quibble – I am a software developer, and I’ve programmed PLCs, which are only a bit above the steps you program into a CNC. Compared to regular software development, programming PLCs didn’t seem left-brained to me at all. It seemed very much like machining a part would be – do this step to these tolerances, then do that step to these tolerances, etc. The basic requirement is to be able to think through a fairly straight-forward machining process from beginning to end. That’s straight-forward as in not many loops or recursions or side-paths or sophisticated error-handling, not straight-forward as in simple.

      Really, it’s something you should be able to train most experienced machinists to do. The problem is the company isn’t willing to pay for the training, and isn’t willing to pay for experienced machinists either. And the NYTimes tried to make the company sound reasonable…

      1. dsawy

        Lots of people think that a company should be able to take a machinist off a manual machine, teach him some CNC stuff and wha-la, he’s a CNC machinist. That’s true in some cases, but not in big production shops.

        For starters, many of the manual “old school” machinists left in this country (and there aren’t a whole lot of them left) are getting close to retirement. A company isn’t about to invest a lot of training in a guy who is going to walk out the door – forever – in five or fewer years.

        Second, learning these skills isn’t something a CNC-equipped company can do “on the job” with the production machines. Many shops are running their CNC machines with high levels of utilization – there’s not a lot of time to take down the production and let someone learn on the machine.

        There is a real problem in this country where for the last 30 years, too many people were obsessed with making sure every kid had a four-year degree, whether it was worth a bucket of warm spit in the real world or not. Work where one got dirty was looked down upon. Well, now the toll is coming due. e.g., The American Welding Society is projecting a shortfall of 500,000 welders in the next 10 years as Baby Boom generation welders retire. Someone has to weld pipelines and structural steel – and while the wages are often rather good, the work is often damn hard, dirty, often out in the cold, heat, mud and dust. As such, a lot of people don’t want to do it. Skills like machining and welding can’t just be learned out of a book – you have to do them again and again until you’ve got a “feel” for the job. The best welders and machinists are able to do things “by eye” or “by sound” – and there is no school that can teach a kid to do this. This is something that has to be learned with experience. Learning machining takes time – and learning CNC machining takes yet more time. Mistakes on a manual machine are annoying – mistakes on a CNC machine are often very expensive. I’ve seen some $500+ mistakes on the CNC machines at my local community college.

        A 20-year man can do stuff “by eye or ear” that a junior level employee simply can’t and won’t be able to for years to come. It isn’t about training alone – it is about experience, and in years past, companies used to be able to find enough journeyman machinists, welders, pipefitters, etc that there wasn’t a problem finding an experienced employee. The obsession with every kid getting a 4-year degree and working in a cubical farm has created a generational “notch” of talent in the workforce. The old guys are retiring, the 18 year old kids sense the opportunity and are learning, but there’s darned few 35 to 45 year old people in the workforce doing this stuff.

        1. Lyle

          Let me add that this set of issues about 35-40 year olds may be a hidden contributing factor to the Gulf Oil spill. The oil industry hired like crazy from 1976 to 1984, and then stopped cold turkey. As a result experienced people are retiring in what is called the big crew change, while there are not the 15-20 year folks in place to run things.
          How this relates: the institutional knowledge level has decreased so that mistakes are made due to sheer ignorance of the effects of a decision.

        2. Richard Kline

          So dsawy, all good points, and I concur. Time was _I_ trained as a welder. I liked putting joins together, and the money would have been good, but it was “damn hard, dirty, often out in the cold, heat, mud and dust.” And I wasn’t too keen on blowoff popping over my mask and burning through hair to my scalp. So I moved west, and by many the odd bounce became a writer nightlighting in a cubilce farm (more or less). I have a ton or respect for veteran manual machinists, a lot more than for cut-and-paste code-floggers in plain words. One reason why these jobs have declined to a degree though is the extent to which you are tied to one place. Not so for some kinds of welding—pipeline for one—but you get use to production work, or you get ten years in on machining the same production set and there you are. Many nowadays move about, and old line, real-value production jobs have the image and often the reality of being rooted in a one place and that’s that.

          I don’t have many answers here. I’ve thought we needed an industrial policy in the US for forty years (having watched the layoff cycle in Automotive, Midwest for most of my growing up). Policy makers don’t do ‘industry,’ though, and here’s another thing: Planning for developing workers of this kind means that, y’know, the plan has to include the work not being shipped to Bangladesh. And the industrial oligarchy and the financial greedheads who have called the tune to both sides of the one-party political system in the US over the last generation will not permit government to keep said malefactors of great wealth from gutting societies workforce for their personal benefit. It isn’t just about people being unwilling to do the work but about those who decide in this society being unable to accept that the work needs to be done and should be supported. Yeah, we proles have to take some of this into our own hands, and make our own decisions about where the opportunity for money is. Having to fight the Man everyday is a lot more wearing than kiting time at the office watching YouTube, not that that’s my _personal_ solution. (I write instead.)

        3. Skippy

          Ditto for me. Always having trades to fall back on or as a second source of income I can relate. In fact I met a Prof of Manual Engineering over here (about to retire after 50y in the game), that started sweeping floor in a mill shop and his greatest admiration for America was its TOOL building, which he saw as dying. To him this was what made the US different for a time, to make tools that were of the highest quality.

          Skippy…all sold for the brasses big house, recreation and dick measuring…how cheep.

    3. Anonymous Jones

      I agree with Yves as well. Training is difficult. It is not just the cost but also the lack of people skilled at training.

      Knowing how to do something does not necessarily qualify you to train someone else at it.

      Without a dedicated training process in place, it is difficult to train.

      When lives are on the line, you generally see better institutional training. See, e.g., the armed forces.

      [Incidentally, when lives are on the line, you see a lot of interesting management choices, including a very serious dedication to chain of command, which often succeeds as an institutional policy despite many case-by-case failures. Again, see, e.g., the armed forces. But this is surely lost on utopian fantasists who believe the good is the enemy of the perfect.]

      1. gordon

        I know lots of people say the US armed forces do lots of useful training work. I have never understood why that investment in training has to be militarised. Why couldn’t it be done by a civilian agency for civilian trainees?

  3. But What Do I Know?

    I’m with you on companies providing OTJ training–it’s my belief that the most a university or trade school can do is provide a general background; if companies want someone who knows how to work the equipment they are going to need to train them. As far as manufacturing, you need a widespread base of talent and people familiar with machinery and process controls to provide employment slack. It is a consequence of our hollowed-out manufacturing base that there isn’t a pool of relatively-skilled worker bees who can be trained in a reasonable amount of time.

    I’m not going to disagree with Neil D that the average American is lazy and incompetent, but that was always true to some degree. But people (men) used to grow up in factory towns in an environment of machinery and tooling–that has gradually disappeared over the years, and it won’t spring up again simply because employers need to add on people for a temporary turn in the business cycle.

  4. Richard Kline

    So Yves, I read the NYT article on ‘those dumb workers,’ and my first reaction was exactly yours. Those selfish motherfucker employers won’t do jack to train anyone in their highly specific, one-off manufacturing processes: that’s an ‘externalized cost’ the employees are expected to fund on their own, or better the present hiring authorities competitors from whom said workers are siphoned off.

    —But it’s muuuchh worse than that. Reading the article, it was stated that the prevailing wage for ‘higer skilled workers’ in the Cleveland area of this article was $15-20 an hour. What the hiring authority was looking for was clearly at the upper end of that, workers who could run computerized machinery for a specific process, read blueprints, and perform advanced mathematical caluclations on the fly; figure $18 an hour just as a guess. What was that hiring authority offering to applicants? $13-15 an hour. Those selfish bastards were lowballing their applicants. BIG TIME. And then surprised that qualified applicants didn’t magically cut their dicks off and walk in the door saying I’m your boy. And THEN bitching to the national press about ‘those dumb applicants.’ Guess the smart ones sussed the situation, huh. This is today’s manufacturing economy, good old 19th century comin’ attcha. Want qualified applicants? PAY THEM A FAIR WAGE!

    1. Dustrialist

      Or import them from India. Indians with a PhD would work for $5 an hour, with no benefits, no job security, and the threat of being deported constantly hanging over them to ensure they work 16 hour days, 7 days a week.

      Face it. Americans just can’t compete.

      1. Francois T

        Import overqualified people and exploit them like serfs/slaves while forcing Americans workers to stoop to that level. My my! That’d be some solution to all the headaches of our beloved wealth creators, wouldn’t it?

        You’re right! Americans can’t compete if their own society decide to screw them at every turn.

        The H1-B system must be totally reformed and Congress must stop screwing around with it.

        1. linda in chicago

          –replying to Francois T at 12:17 pm

          One reason that there is a shortage of NA postdocs for science labs is that there is a shortage of NA science PhDs, period. Anyone who is smart enough to be a scientist wants to make more money doing something else. And why not? The training is expensive, the hours are long, and the work is hard, on top of the unspectacular pay.

          A lot of science labs are funded by federal and state grants. The pay scale for their postdocs is set by the govt, not by the lab doing the hiring.

          It could be that the crash of the FIRE industry will ultimately channel more clever people into science, but it will take a while.

          1. Anthony

            I am a NA science PhD. I am now not doing science research because I was not able to find a position. I went to a good Top 15 graduate program and did a post-doc at a Top 5 university. I have a handful of good first author publications. I have also worked in the biotech industry.

            In academia, tenure track young scientist positions only exist in my dreams. More than likely, I would have ended up as a research staff. I would have been paid lower than a technician in industry and be required to perform more duties and have more responsibilities. Furthermore, the US graduates about 20,000 science PhDs a year, and there are maybe 2000 assistant professor positions a year. Those are not good odds.

            In industry, if you don’t have the specific skills and expertise the position, you are not qualified no matter how much brilliant research you have done. They definitely do not want the lag time associated with getting you up to speed on the field AND the research going on. The optimal candidate is someone already doing the exact same thing in some other company. Either that or you have to be an acknowledged “knowledge leader” in your field, which means you are already really successful in academia.

            Basically, graduate students are in great demand because they work for nothing, work insane hours (>70 hours a week), and are highly motivated. However, once they receive their diploma, there are, frankly, no jobs for them. There is no shortage of PhDs. There is an immense shortage of jobs for PhDs.

          2. Piers

            That means that every year 18,000 science Ph.D’s don’t get jobs in academia. A simple computation yields, that ten years of accumulated non-academics means 180,000 Ph.D’s without jobs in academia, or in 30 years 3/4 of million Ph.D’s without jobs in academia.

            Given that Ph.D’s have been trained to make discoveries in their field, there is a huge waste of good human resources being squandered here.

      2. Yves Smith Post author

        You are missing the impact of extra managerial cost. This is NOT about labor costs, but a transfer from low level workers to management. On software projects, IBM can get the programming done in China for 25% of its cost in the US, but its EXPECTED cost is 80-85% of the “all in US” cost. Look at the magnitude of offset via extra managerial cost.

    2. Francois T

      Pay them a fair wage?

      Fat chance! Corporations and universities are so used to get what they want on the cheap, it’s not even funny. Admire the bottomless pit of sleaze and depravity from our “elite” organizations:

      During the 1990s dot-com boom, as the market for information technology workers began to tighten and salaries to rise, information industry interests agitated in Congress for admitting more high-skilled foreign workers. According to Teitelbaum, lobbyists for the tech industry struck a deal with those of the research universities: If the universities would support a higher visa cap for industry, industry would support an unlimited supply of H-1B visas for nonprofit organizations, essentially giving universities the right to bring in as many foreign postdocs as they wished.

      Since then, tens of thousands of Ph.D.s, primarily from China, have arrived to staff American university laboratories, and the information industry has padded its ranks with temporary workers who come largely from India. The transformation of postdocs from valued protégés to cost-effective labor force was complete.

      Harvard economist George Borjas has documented that an influx of Ph.D.s from abroad reduces incomes of all comparable doctorates. Although some people argue that advanced education assures good career prospects, “the supply-demand textbook model is correct after all,” Borjas says. <b.It turns out to work as powerfully on molecular biologists and computer programmers as on gardeners and baby sitters.

      Until the powers that be stop displaying infinite disdain and contempt for the average folk, this state of affairs won’t change one bit.

    3. drexciya

      That’s a classic. I have talked to a recruiter in the IT biz a few years ago and he said that if someone wanted him to find someone with a certain skill set and offered compensation below a decent market value, he would kindly refuse to take the search job. It’s just a waste of everyone’s time.

      1. Richard Kline

        A waste of time is exactly what is was, yes, reading the article. The company wanted to hire hundreds. With unemployment terribly high in Cleveland they had 3200 applicants to process. They hired 47 who were qualified. The dumbasses probaly _lost_ money on the exercise with all the staff time they had to committ; it would have been cheaper just to give out OT to their current workforce for all they gained. And yes, with 3200 showing up obviously many are not going to be remotely qualified for the position, and one would think that indeed 1000 didn’t have 9th grade level English or basic math, not things that an employer should ever be training for. What the reporters missed in doing this article was just how mismanaged the company was (or perhaps inexperienced since they were in the midst of a major production expansion). They screwed up the hire by going into it with the wrong expectations, and that says a great deal more about the _managerial_ competence of that outfit than about the skills of the potential area workforce. And if the company making the low ball pay offers can’t make their business model work with real numbers than they don’t have a business: they have a sweatshop, and no one with a choice is going to work for them, something the reporters of this piece also couldn’t get their heads around.

        1. run75441


          You believe Boehringer Ingelheim to be a sweat shop? Not likely. In any case, I think we are reading rather poor reporting.

    4. john bougearel

      There would be a talented skilled workforce if the employers wanted to invest in their employees. Investing costs time and money, and what a waste of capital that is when you are going to fire half the workforce in an economic downturn so the company can survive. The talented skilled workforce gets flushed down the drain with every recession.

      American companies would be wise to adopt the German business model and not be so quick to fire everybody at the onset of a downturn. Work em part time in a downturn, but do what you have to do to ensure worker retention. Then employers would not need to complain about a lack of a skilled workforce when the economy turns back up, because they had retained a skilled workforce during the downturn.

      The American business model of yesteryear that invested time and money in their employees with the expectation of retaining them for a lifetime wasn’t such a bad model after all.

    5. doc holiday

      The hyperbolic use of the m & e words ( motherfucker employers) along with the very crisp use of the phrase: “applicants didn’t magically cut their dicks off and walk in the door saying I’m your boy” was both insensitive and tasteless — and I’d like to see more of the same in the near future!

      Sorry I’m late….

    6. run75441

      Hi Richard:

      Typically, an injection molding press operator gets paid $14/hour at a tier one in Detroit. That is about right for a machine operator who has to set up a press. Most operators do not program CNC machines or cells. This is done by a programmer. Operators are responsible for checking parts for critical dimensions with go/no go guages or calipers.

      I beleive the NYT article to be half baked by reporters who have little experience in manufacturing. Furthrmore, why would a press operator hang around?

  5. skippy

    NYT article, problem is then the staff could do their job and then the floor Mgrs job too, management don’t like that very much.

  6. wunsacon

    >> Factory Jobs Return, but Employers Find Skills Shortage

    Employers contriving data to push for more immigrant worker visas?! Hoocoodanode!!

    1. Dustrialist

      It’s called making U.S. workers globally competitive. Also, why employ people anymore when you can make them “independent contractors” and pay them 10 cents an hour without paying their Social Security taxes or any benefits?

  7. PunchNRun

    Neil D.’s comment’s (On worker training:) unstated corollary must also be recognized. Management is average too.

    One thought, the work ethic as a cultural mainstay persists only where it is successful. Where hard work makes no difference, the trait will die.

  8. Tom Crowl

    If you’ll forgive a very brief general rant…

    It is so maddening to see the same group of groupthink “experts” constantly on parade on the various msm outlets!!!!!

    You know that old Einstein quote: “Insanity is doing the same thing over and over again and expecting a different result.”

    Well, nations and civilizations go ‘nuts’ too!

    So why do we keep seeing the Greenspans, and Geithners, and Bartaromos spouting the same garbage?

    And I keep hearing that Corporations have great balance sheets and are flush with cash…

    and therefore… (now get this!)

    that the poor corporations need STIMULUS! They need tax cuts and lower labor costs… Oh… Oh… its so tragic! They need our help! They can’t invest! The market here is weak they cry.

    Well DUH! I guess they have a point!

    Dudes… the reason they’re ‘flush’ is they’ve eaten the damn turkey! US! You and me!

    And now they can’t understand why there’s no more turkey to eat.

    (and I know this won’t make immediate sense without further exposition. and maybe I’m wrong. These are concepts in development)

    … the reason we need some form of productive ‘trickle up’ has to do with the relationship of ‘social energy’ to actual social metabolism. Which is why both catastrophic inflation AND deflation are different expressions of the same phenomenon… a society at war with itself… where critical social vectors approach a net of zero.

  9. Tom Crowl

    Though I do have some agreement with the austerity position.

    But to me austerity means things like ‘abandoning the empire’ and drastically cutting the ‘social energy’ wasted on military expeditions and the insane expansion of the “mercenary sector”… definitely a sector needing to drastically shrink!

    1. Dustrialist

      I for one would have a lot more confidence in the soundness of the U.S. if they slashed medicare and social security, and stopping giving out entitlement payments like food stamps, unemployment benefits, and disability payments.

      These programs are making the U.S. uncompetitive with places like Indonesia and the Philipines.

      Just look a Bangladesh as a model of how to stimulate industrial production.

      1. Francois T

        In other words, you want the US to become the Brazil of the ’40s and ’50s. Small islands of immense wealth in an ocean of destitution and misery.

        And you really think the US would have any chance of staying a competitive nation with such a social set up? Did you dedicate more than 2 seconds of thinking before posting or were the talking points already stored in your limbic system?

        You’re either jesting, or you are as ignorant and narrow-minded as your writings suggest.

        1. Dustrialist

          I don’t see why the U.S. couldn’t stay competitive when everyone else is doing the same thing.

          You seem to have a problem with oceans of destitute and miserable people. I think that’s a feature and not a bug.

  10. Jeff

    re: Charter schools

    The problem with public schools and charter schools are that they are free. When something is free, people don’t value it, and that means they don’t pressure their children to learn.

    What we need is tremendously expensive private education starting from pre-school. Then there will be enormous pressure placed on children to perform, and the right incentives on teachers to enter the profession.

    End public education now.

    1. Anonymous Jones

      First off, I’m not sure why I always find myself responding to the biggest idiots in the comment thread. Maybe it’s a personal failing.

      “When something is free, people don’t value it.”

      1. I hope you don’t really believe this. Do I really have to tear it down? Do you value your family relationships? Your friends? This is preposterous.

      2. Public education is not free. There are huge costs involved, and yes, the only *marginal* cost to the end user is the end user’s time. But saying something is “free” just as long you spend twelve years of your life obtaining it is perhaps turning the concept of free on its head. Bueller?

      3. Do other countries that have public education suffer just as much as we do? Should Finland end public education? Their results are *terrible*!!! Should Japan? We know what a disaster that system is. Their students are incapable of anything.

      Seriously, why do I respond to people whose ideas are so stupid that you can spend paragraphs attacking just a few of their words? Maybe it’s because it’s easy. Maybe it makes me feel better. Who knows?

      1. Jeff

        Well, Jones, whether you agree with it or not, this is what is happening in the U.S. and the reasons for it.

        The powers that be have seen fit to agree with me and are actively dismantling public education in a two step process of crushing teacher unions with charter schools, and then finally abandoning charter schools.

      2. Skippy

        Not to worry AJ, simple solution’s for simple people. I remember when they privatised the UNI system over here, the results are in and !yes! you get what you pay for, cubical minds, minds that are as broad as an excited electron.

        I find parallels to past societal events where the masters fear the commons and feel the need to dumb them down/limit information/facts. Fixing money, ability too pay, is an easy means to accomplish this tick with out being to obvious.

        Skippy…Education should be free[!] the facts inherent to the Universe should not carry a price tag.

  11. Francois T

    Re: Factory Jobs return


    You wrote:

    a separate issue is the abysmal failure of our educational system, particularly in its indifference to vocational training.

    I must take exception with this statement. Any parent who takes a good look at the VoTech option is usually agreeably surprised. Trust me, I speak from personal experience. Where I live (SE Pennsylvania) the rate of placement at graduation in the 15 “most in demand” trades was 97% in 2007. Of course, some trades have experienced a drop since then, but others like industrial nanotech, robotics, computer assisted industrial machinery are still pretty hot. Some peculiar trades are just plain radioactive; for instance, electrical grid operators can command a starting salary north of 75K with bennies after 3 years of tech college. Not bad!

    The biggest problem with VoTech stems from the fact that high schools are rated by the number of students they “send” to college. Hence, they tend to pass under silence the VoTech stuff. However, when talking with those who work on the inside, it becomes obvious that demand for well-trained students is strong in several sectors.

    That said, I completely agree with you that a lot of corporations are not very good at nurturing in-house training. They seems to have this mindset that it shouldn’t be part of their business plan, a rather silly position.

    1. drexciya

      I cannot help but think that this is a management failure. For one reason or another they don’t seem to grasp the importance of educating/training employees. It’s also a very powerful “tool” to retain people. That’s also a big fail to me; keeping people is also very important and saves money in the long run. Unfortunately managers are very short-sighted most of the time.

      In Europe some companies still try to keep good people although there’s not enough work at the moment. If you ruthlessly downsize your company, people will remember that if times are good again.

      1. Francois T

        Oh! It is a management failure, no doubt about it. When a manager always have the option of cutting the workforce to meet the numbers, that has to foster a tremendous laziness in creativity.

  12. S Brennan

    “Factory Jobs Return, but Employers Find Skills Shortage”

    Is another in a long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, long, line of New York Times articles that using falsehoods blames the workers for management incompetence.

    The article is a series of lies. S Brennan, B.S.A.E [from a top 5 engineering school].

    A recent Craigslist ad making the rounds: “Engineer with [list of 20 specific skills, including Mandarin language mastery] 3-5 years experience 18.50/hr.”

    The NYT would read that ad and run the headline “NATION IN CRISIS OVER MANDARIN SPEAKING ENGINEERS”

    The “Skills Shortage” this nation has…is in Main Stream Media [formally known as journalist] editors/reporters.

    1. NOTaREALmerican

      Re: The “Skills Shortage” this nation has…is in Main Stream Media [formally known as journalist] editors/reporters.

      Absolutely right. “Journalist” no longer “investigate” most regurgitate. But, as most Americans cringe at questioning “there betters” I guess this was (is) inevitable.

      Until there’s some doubt shown in the society about its basic myths, nothing can change.

      1. Propagandist

        Some regurgitate, but the real art of journalism these days is improving on the impact of government propaganda.

        For example, representing paid spokespeople as independent sources. Pretending to leak “secret” information. Getting people to accept unstated premises as true. Causing the opposition to lose steam by wasting all their resources and energies.

        This is the real heart of journalism, and it’s being practiced with enthusiasm and ingenuity by our nations best and highest-paid journalists.

        1. Harvard Holiday

          By setting up their own independent production companies, [presenters] can get a second bite of the cherry. It’s potentially very lucrative.”

          Norton, believed to be the BBC’s second best-paid star with a salary of £2.5m a year, has a similar arrangement. His programme, The Graham Norton Show, is produced by So Television, which he owns jointly with Graham Stuart, the television producer.

          >See? Stars are paid twice in secret deals at the BBC


  13. burnside

    On drillers intercepting their target – they’re using a sensor, lowered into the core of the relief well, which becomes more accurate the more nearly it approaches its target. There are any number of things which may go wrong, but this one aspect is reasonably reliable.

    1. MyLessThanPrimeBeef

      That seems not to be as hard as Reagan’s Star Wars initiative…you know, shooting down a moving missile with anthoer missile mid-air.

  14. csissoko

    “And the Journal fails to add that most large corporations treat Treasury as a profit center. In other words, these companies do more than just hedge.”

    The bill states explicitly that only “swap dealers” and “major swap participants” have to post margin. So the only “end users” affected are those who are also “major swap participants”.

    “A major swap participant is defined as a firm that has a substantial position in swaps excluding positions used for hedging commercial risk and whose swaps create “substantial” counterparty exposure that may have serious adverse effects on the financial stability of the U.S. system.”

    From Nasdaq News

    So the whole to-do is over the fact that the end users exemption won’t be able to negate the whole purpose of this part of the law.

    1. Yves Smith Post author

      A beg to differ a tad. Why should ANYONE not post adequate margin?

      And the idea that these customers don’t pose systemic risk is uninformed. A failure to pay by a SINGLE customer, a $400 million order, nearly put the Chicago Merc into collapse in the 1987 crash. It was only by sheer luck that its bank’s CEO was in early and overrode the refusal to extend emergency credit (by a 3 minutes margin!) that kept the exchange from failing. If the Merc had not opened, the NYSE would not have opened, and its chairman stated it might NEVER have reopened if it closed then.

  15. csissoko

    In case it wasn’t clear the Nasdaq news link refers to the quote defining “major swap participant”, not my final statement.

  16. See No Evil Holiday

    ‘To the dolphin alone nature has given that which the best philosophers seek: friendship for no advantage. Though it has no need of help of any man, yet it is a genial friend to all, and has helped man.’ – Plutarch

    ‘The Dolphin is not afraid of a human being as something strange to it, but comes to meet vessels at sea and sports and gambols round them even when under full sail’
    – Aristotle

    Also see retarded science fair project:

    NOAA and University Scientists Launch Research Cruise to Determine Effects of Oil Spill on Endangered Whale

    “By recording the sounds from all the marine mammals that live in the Gulf of Mexico, we can get a more complete picture of the health of this ecosystem,” said Dr. John Hildebrand of Scripps, who heads this effort. “By beginning our study soon after the spill began, we may see trends in the presence of animals in the affected area.”

    ==> These retards are doing a study to record sounds (?????) …. and meanwhile, the NOAA and NASA planes that can capture oil spill images are on the ground — as BP, Coast Guard and EPA screw around with ways to bury this disaster…. maybe these top notch science people (guests) on this PR Cruise should go back to the beaches covered with oil and record the sound of dead animals …. pathetic!!!!!!!!!!

  17. prostratedragon

    From the NYTimes labor article:
    “During the recession, domestic manufacturers appear to have accelerated the long-term move toward greater automation, laying off more of their lowest-skilled workers and replacing them with cheaper labor abroad.“.

    Automation??? Got to watch these folks constantly.

  18. Summer Holiday

    Welcome Aboard

    Recreational Activities

    Sunbathing is permitted only by off-duty personnel and only on the 03, 04, or fore deck areas. Appropriately modest attire is required. Sunbathing shall not interfere with any work that may be required in the area. Sunbathers shall leave the area in the same condition they find it. Ship’s linens may not be used for sunbathing.

    Also see happy squid hunters:

    Giant squid are difficult to capture, but they are usually found in continental-slope areas, where the relatively shallow water near the continent drops off into the deep sea. They seem to be concentrated in places where undersea canyons cut into the slope, where they feed on fishes and other squids.

    ==> Sorry, I can’t find the operating budget for this pleasure cruise … who cares…

  19. Harvard Holiday

    Every day, students, faculty, and staff recover enough recyclables from Harvard Yard to fill 326 trash bags.

    Hmmm…. is that right? I guess this indicates that rich kids need people to pick up after them; I wonder how many Harvard grads end up with corporations like BP?

    1. harvarder

      I do know that Blackrock (Pete Peterson’s hedge fund), is BP’s major shareholder and largely run by Harvard grads.
      If it weren’t for Blackrock, there wouldn’t be so much worry about BP’s shareholders.

  20. Beach Tar Vacation

    Gulf Coast is expecting a glum Fourth of July

    “We got hit right between the eyes in June. July is starting to look like a total disaster,” moaned hotel owner Julian MacQueen, who said his 181-room Hampton Inn in Pensacola Beach, Fla., should be booked solid but is only 70 percent occupied, even with rooms reduced from $225 a night last year to as little as $150.

    Can you imagine paying $150 a night to watch the oil flow in? A room with this view is worth about zero!

  21. Valissa

    re: Afghanistan… the latest news from the Brits (Cameron, Hague) that they are willing to stay in Afghanistan until 2014 or 2015. I’m sure that means the US will be there at least as long. Cheerio and thanks for the info!

    Petraeus urges unity in Afghan war
    William Hague, the new British foreign secretary, said on Thursday he would be “very surprised” if Afghan forces had not taken control of their own security from international forces by 2014.

    However, he insisted Britain was not setting a timetable for withdrawing its 9,500 troops from Afghanistan, even after David Cameron, the UK prime minister, said last week that he wanted them home before the next election in 2015.

    “There is a difference between all nations,” Michael Codner, a defence specialist at the Royal United Services Institute in London, told Al Jazeera.

    “US president Obama mentioned last autumn that July was the time to consider troop withdrawals. The UK’s David Cameron talked about 2015 would be the time in which they’d hope to reduce, but there other nations such as Canada and the Netherlands who have decided to reduce their forces. “The smaller contributors would see it as doing their share, and when have done their share then other nations should take it on.”

  22. Conor

    Thank you!!! Regarding training factory workers, you took the thought right out of my brain! It’s become the general problem with basically everything in America – penny-wise, pound-foolish. *whew!* I better stop right there before I go on an atomic rant. But… *sight* (trying to exercise self-control)

  23. Charlie

    “Neil D says:
    July 2, 2010 at 7:39 am
    On worker training: Having worked in manufacturing for the last 20+ years, I think most successful college graduates don’t grasp how truly lazy and incompetent the average American really is. It really is hard to find good help anymore”

    The “average American” is lazy and incompetent for a reason: he thinks that hard work and good workmanship are irrelevant. They are. Maybe you interact with these people as a supervisor, i.e. someone who gets lied to, or maybe you just haven’t been curious enough to ask them why they do such a bad job. I have – and they just shrug and say that it doesn’t matter, often providing rather convincing evidence for the claim. “You know there’s no employee of the month here Charlie” as a lazy, incompetent co-worker told me once.

    Where I work, the only people whose behaviour I find difficult to explain are the ones who actually give a damn; their work ethic is clearly based on some internal drive because they don’t get rewarded for it (not a personal complaint – I don’t work very hard myself, I just see people doing it).

    Dostoyevsky, in his book Memoirs from the House of the Dead, a fictionalized account of prison life in Siberia, described how the prisoners were forced to spend the whole day disassembling a ship. They were stupid, lazy and argumentative, just as you would expect from prisoners – until the guards changed the rules, and told them they could have the day off as soon as they finished. Suddenly the stupid, lazy dregs of Russian society became an intelligent, coordinated team and polished the job off in an hour or two.

    There are two necessary conditions for getting high-quality skilled labor: their pay has to depend on high-quality work, and they have to make much more than unskilled laborers or they will have no reason to put up with their supervisor’s demands. If all they get for good workmanship is their boss’s approval, and all they get for bad workmanship is bitching, only a few psychological curiosities will do a good job.

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