Improving Economic Signals May No Longer Deliver Votes - WSJ

[question everything]

Nagging Anxiety on Jobs, Pay Haunts Bush Re-Election;
View From Swing States President Cites 'Transition'

By JACOB M. SCHLESINGER
Staff Reporter of THE WALL STREET JOURNAL

WEIRTON, W. Va. -- In 2000, Chuck Svokas voted for George W. Bush. The 56-year-old resident of this industrial area was angry at the Clinton-Gore administration over steel imports. The support of self-described conservatives such as Mr. Svokas helped Mr. Bush carry this state by a slim margin.

This year, Mr. Svokas says he will vote for Massachusetts Sen. John Kerry. He likes some things the president has done, including invading Iraq. But as Hancock County's economic-development director, Mr. Svokas has been mostly disappointed. The workers at struggling Weirton Steel Corp., the county's largest employer, saw their pensions slashed last October, and the company goes to court Monday seeking to terminate retiree health benefits. About one-third of the company's workers are expected to be laid off over the next few weeks.

(snip)

The problem for Mr. Bush is that the benefits of the current boom don't seem to be spreading as widely, or as meaningfully for workers, as the last one. Many of the new jobs in Weirton pay $10 to $12 an hour, compared with well over $20 for the old ones. When one company came to Mr. Svokas recently, seeking to expand operations and hire 350 additional people, he asked whether those workers would get health insurance. The response, Mr. Svokas says, was: "The company will pay a small portion of it, while employees will pay for most."

(snip)

At the same time, many families have seen the fraying of conventional safety nets, such as health insurance, pensions and government services, that are especially important in just such times of instability. The share of Americans lacking health insurance of any kind rose to 15.2% in 2002 from 14.6% the year before. And while overall inflation is down, the bills for some major household expenses -- including gasoline and prescription drugs -- are leaping upward. Public college tuition rose 13% during the current school year.

EDITED BY ADMIN: COPYRIGHT

URL for this article:
http://online.wsj.com/article/0,,SB107930266951654845,00.html (paid subscription)

[historian]

1. yes well

welcome to the real world folks. Whipping out the flag and waving it because you are told to carries a heavy price

[ithacan]

2. really

this guy liked that Bush invaded Iraq?

Let him eat that!

[question everything]

24. We really should embrace him

Every vote counts. I think this is what Howard Dean meant, but did not express it well, when he said that he wanted to attract the guys with the confederate flag and the gun racks (or something like that).

So, yes, we do need to attract many who still support the war in Iraq, but who realize that this does not help much at home. So let's decide to "disagree" on issues, like the war, gay marriage, everything religious and see if we can get these people, too, to vote for Kerry in November. After all, this is what counts.

[rfkrocks]

3. In a republic

the citizens need to be involved in decisions of war-not just yes men for their government-that is how morons can cut taxes while simultaneously spending for wars

[Bullshot]

4. I'm not convinced that the economy is actually turning around.

Every week, I read about jobs going out of the country. Pessimistic outlooks for this year's college grads. Continued low interest rates, which may be great if you're borrowing, but what about the senior citizens who were planning to live off the interest of their nest eggs?

I think all of this news about the economy turning around is Bush and his puppets in the media spinning themselves dizzy with the hope this country will believe what they're hearing.

I'm not buying it!

[sendero]

7. I'll go you one further...

... the economy is NOT turning around. Various numbers are fudged and massaged and delayed - all to make it look like things are turning around but there is little hard evidence of any actual turnaround.
That little GDP spurt late last year means jack. We would need several quarters like that in a row to do anything.

A lot of folks think "well the stock markets are doing well, there must be a turnaround".

Au contraire, the stock markets are little more than legitimized casinos, and the players are all betting on a bigger fool down the road. What few good corporate profits there are seem to be coming more from "productivity" gains and outsourcing, good for a temporary boost but decidedly bad for the long term.

Besides all that, many think we are already at another market top, and the downside could be rather large. If I were to put a dime in the stock market, it would be to sell short.

Consumers, the backbone of our economy, are facing unprecedently debt loads. People are cashing out the equity on their homes, running up their cards. Some out of necessity, others foolishly.

Either way, without significant job growth there is nothing to pull this economy up IMHO. And job growth seems like a dream at this point.

[Liberal Veteran]

12. Even the stock market has been less than stellar lately...

The DJIA is down 500 points in 5 days.

[kysrsoze]

9. It's looking bad. I switched my funds over to more bonds

Nasdaq is down to 1940 and the Dow is teetering around 10K. Nothing to push it up, I'm afraid.

[metisnation]

22. rates

greenspan will jack with the rates after the elections causing bonds to soar up.

[calimary]

26. And they've delayed the release of the Producer Price Index -

TWO months in a row. January AND February numbers. For some reason, they're just - er - uh - not being issued...

While the middle class gets poor, the poor get poorer, and the republi-CONS bow and pray to their god of greed, IGMFU (I Got Mine, F-U). Just ducky, isn't it?

[reprobate]

14. The problem is that there are really two economies.

It occurrs to me that the 'economy' that the financial mavens talk about should really be called the 'financial corporate economy'. There is another economy that we already call by another name, 'consumerism'.

I think the problem is that until now, there was an interaction between them. When the financial system prosperred so did the consumer. This is the first time that the consumer has been left out of the loop, due to the offshoring of jobs. There are now fewer american consumers because the transfer of wages to employees is leaving the country.

Of course, since we no longer export enough to drive the economy, the lower number of consumers will have to start bringing down the financial-corporate system.

America, first amoung the third world.

[newyawker99]

20. Hi Bullshot!!

Welcome to DU!! :toast:

[kalian]

5. "Improving economic signals..."

ummm...which ones? :shrug:

[Zero Gravitas]

6. Things look good

if you are the CEO of an "American" Corporation. Maybe that second yacht is possible now. If you're not part of the top 0.5% well, to quote "War-President" Bush, "who cares what you think?"

[54anickel]

8. You've not been paying attention to Greenspin and Snow again. It's

rebounding everywhere, and those jobs are right around the corner. There's no PPI because there's no inflation to report.
Now sit down and eat your cake! :evilgrin:

[kalian]

11. I'm weary of liars and thieves....

;)

[0rganism]

10. "Improving Economic Signals" are crap. Show us the money.

So what if some CEO can buy an extra yacht this year? We can't eat Economic Indicators. The DJIA doesn't pay for the mortgage. Some bleak day the excesses of this administration are going to hit home, and the people will be furious. Let's hope that day comes BEFORE the election.

[Ernesto]

13. Improving signals?

How bout YOU, Mr wallstreet: sit across the table from YOUR children while YOU have NO JOB or healthcare & the unemployment checks are running out...... Tell us that it's going to be "OK" as soon as the chimp's bribe to the rich- tax cuts trickle down to YOUR children. WTF? DUH! (oh did I fail to mention that YOUR job job has gone overseas & it ain't coming back?)

[Crachet2004]

15. I recently went to a labor rally where there were about five different...

speakers-steelworkers and chemical workers mostly. The jobs that are being outsourced are often decent union jobs. The thrust of the whole thing, was that if a trade war must come, let it come now, while we still have some manufacturing to fight back with. They are convinced it must come, as we cannot compete. Renegotiate all the trade treaties and get out of the WTO.

The final speaker had actually been to China, Malayasia, Bangladesh...places like that, and toured the factories as a prospective buyer. He had some pretty horrifying stories, and pictures to back it up. Had they caught on to him in one of those authoritarian Asian countries, I figure they would have wanted to kill him.

He said the wages are down to .07 cents an hour in some places...they compete against each other for even these jobs. Said he saw a six year old girl, putting toxic glue on with her bare hands, making tennis shoes. Girls working 18 hr. shifts, then curling up on the dirt floor by their sewing machines to sleep, until the next shift. He said he had talked to women who were beaten for not keeping up with the assembly line...and on and on.

And we are supposed to compete with this? How. This is the way people were treated in the early days of the industrial revolution in THIS country. Now it seems, the corporations want to turn back the clock. Labor is so cheap over there, it is not a true cost of doing business...more like buying paper would be anywhere else-an expense, but inconsequential.

I can't believe it is helping people in Asia, for our corporations to treat them like they do; and I can't believe there are Americans as inhuman as I now know they are. And they sure are'nt helping the American worker, either.

I'm not buying another damn thing at Walmart, as their factories overseas are some of the worst. Hard to believe Americans could act that way. But they do.

I feel embarassed to be part of a nation that allows, even ENCOURAGES, this kind of inhuman behavior over obscene profit. Because that was the final point made at the rally...we are'nt REALLY even getting anything any cheaper; the corporation just makes more profit-hundreds of precent more. And that's the bottom line.

[question everything]

25. It is a viscous cycle

We are losing good paying jobs so we can only afford to shop at Wal-Mart and so it goes.

This is something that I have never understood. At what point will the CEOs realize that no one can purchase whatever it is they are pushing?

On ABC news this evening, the story was about how employers are being squeezed by health care costs, even with more employee's participation.

Will HMO's and the pharmaceutical industries ever realize that no one can afford them, at all?

Henry Ford is not one that I admire, but at least, when he started with his car manufacturing, he said that he was going to pay his employees so that they could afford to buy what they were making.

In 1979 many started abandoning Detroit cars in favor of the Japanese imports. I was in the market for a new car and made a deliberate decision to buy American (Ford Mustang). And then felt like a sucker when a co-worker, whose husband was a mechanic at Ford, was buying a "Toyota, of course." (Have been driving Toyotas since, though)

But when Dean or Kerry are talking about limiting outsourcing, the pubs jump all over that merchandise will be more expensive. And if your income is lower.... and so it goes.

[PROGRESSIVE1]

16. The rich are doing VERY WELL Mr. Bush! The average person...

is struggling! There's more to a good economy than the wealthy gaining more wealth.

Repubs :eyes:

:kick:

[fearnobush]

17. `Dragon's Head' May Intensify U.S. Jobs Exodus

`Dragon's Head' May Intensify U.S. Jobs Exodus: Andy Mukherjee
2004-03-15 16:10 (New York)

`Dragon's Head' May Intensify U.S. Jobs Exodus: Andy Mukherjee

(Commentary. Andy Mukherjee is a Bloomberg News columnist.
The opinions expressed are his own.)

By Andy Mukherjee
March 16 (Bloomberg) -- China has put together a software
industry group it unofficially refers to as ``Long Tou,'' which
in Mandarin means ``Dragon's Head.''
For what it's supposed to do, the name couldn't have been
more appropriate.
Just as a dragon's powerful head leads the rest of its long
body into battle, the 50-company group set up by the science and
technology ministry in Beijing will guide China's low-wage
onslaught into computer software.
If the China Offshore Software Engineering Project, as the
group is formally named, succeeds, hundreds of smaller companies
could follow.
Forrester Research Inc. has forecast 3.3 million U.S.
service-industry job losses between 2000 and 2015. If China
becomes a strong competitor for those jobs, the number could go
higher.
The question is, ``Can Chinese software makers do it?'' For
a possible answer, look at what makes Indian software companies
so successful.
Indian software developers typically have 60 percent to 70
percent of their people in India, where programmers earn a sixth
of what code writers charge in the U.S. The remaining 30 percent
to 40 percent of employees work in the U.S. and Europe, and bid
for business and manage projects. The geographical dispersion of
the workforce leads to a 24-hour workday.

Global Model

How do we know the Indian model works? Net income at Infosys
Technologies Ltd., India's No. 2 software exporter, was about
$12,850 per worker in the year ended March 2003.
In comparison, net income per employee at Plano, Texas-based
Electronic Data Systems Corp., the world's No. 2 seller of
computer services, was $8,150 in 2002, according to Bloomberg
Data.
Can Chinese companies replicate the Indian model? They are
doing just that. Take Bamboo Networks Ltd., a Hong Kong-based,
closely held company.
Bamboo is a five-year-old software developer, one of the 50
companies in the ``Dragon's Head.'' It has 175 employees and does
programming work in the southeastern Chinese city of Guangzhou.
By comparison, India's Infosys had more than 15,000 employees a
year ago, and is adding between 1,500 and 2,000 code-writers and
project managers in the current quarter.

Matter of Time

Scale isn't such a big deal. Chinese software companies can
grow just as fast as their Indian competitors did in the 1990s,
as long as they can tap opportunities worldwide, while keeping a
majority of their people in China, another low-wage country.
``While we're not an exact parallel, we're in very many ways
similar to Indian software companies,'' says Gene Kim, 34,
Bamboo's founder and chief executive. Kim says his priority is to
increase the services his company offers global clients, such as
investment bank Lehman Brothers Holdings Inc., consumer goods
maker Procter & Gamble Co., computer company Hewlett-Packard Co.,
and Japanese cellular phone maker NEC Corp.
Bamboo's Guangzhou unit received the highest quality
certification given by the Software Engineering Institute of
Carnegie Mellon University in December, two months after Newsky
Technology Group became the first company on mainland China to
win the Capability Maturity Model Integration Level 5
accreditation, the highest ranking.

Quality Assurance

Indian companies have routinely used certifications to make
their mark. Manoj Srivastava, managing director of New Delhi-
based Espire Infolabs, which won the CMMI quality recognition at
the same time as Bamboo, said the award was evidence that
``Indian organizations are constantly raising the bar in
comparison to our biggest competitor, China.''
Bamboo and Newsky show Chinese companies won't be pushovers.
They won't be held back by lack of manpower. India has a
pool of more than 2 million engineers, 8.5 times the size of
China's technical workforce. Still, college enrolment in China is
rising rapidly, and more students are learning English.
Bamboo's Kim doesn't rule out going into India at some
point. At the same time, Indian software companies such as
Infosys, Tata Consultancy Services Ltd. and Satyam Computer
Services Ltd. have already set up operations in China.

Global Competition

Ultimately, India and China may complement each other's
strengths. Indian companies will use Chinese programmers for
writing basic codes, wile Chinese software developers will use
the Indian talent pool to recruit systems architects, project
managers, and other top professionals, of whom there is a
shortage in China. To cite just one example, Rajesh Rao, Bamboo's
chief operating officer, is an Indian national who worked for
five years at Infosys in early 1990s.
``India has a much deeper talent pool, but China is going to
catch up,'' says Rao, 32.
For the U.S., it's time to get real about jobs outsourcing.
India and China will be formidable sources of wage-cost
advantage. And don't forget the Philippines, or countries in
Eastern Europe. Protectionism won't help, for it could only lead
to trade spats, which don't help anyone.
``No one said globalization would be easy,'' says Morgan
Stanley Chief Economist Stephen Roach. ``But in the end, it sure
beats the alternatives.''

--Editors: Ahearn, Henry

Story Illustration: See {TNI CHINA SOF BN <GO>} for other stories
on China's software industry. For a tour of trade stories, see
{CNP 02877200102 <GO>}. For statistics on U.S. employment
figures, type {ECST <GO>}, {19 <GO>} and follow prompts. To
comment on this column, go to {LETT <GO>} and write a letter to
the editor.

To contact the writer of this column:
Andy Mukherjee in Singapore (65) 6212-1591, or
[email protected].

To contact the editor of this column:
Bill Ahearn in New York (1) [phone], or
[email protected].

[Moderator]

21. fearnobush

Per DU copyright rules
please post only four
paragraphs from the
news source.

Thank you

DU Moderator

[depakid]

18. The current "boom?"

This goes to show you just how completely OUT OF TOUCH WITH REALITY the Wall Street Journal is. Schlesinger and his pals can't see beyond their fetishes with numbers like the Grossly Distorted Product or the DOW, even when they try (although you have to admit, at least he's trying).

[Moderator]

19. question everything

Per DU copyright rules
please post only four
paragraphs from
the news source.

Thank you.

DU Moderator

[question everything]

23. Sorry, will do n/t