Wednesday, March 28, 2012

Dissecting Influence in the 2012 Election

 Facing Facts About the Electorate

The Jeffersonian image of an "informed electorate" may bring ideas about education, media and even the adolescent values promoted during childhood upbringing.  One way or another, by the time a voter registration card enters the purses and wallets of Americans, a general body of knowledge and information has amassed in the minds which will, in turn, execute the ballot which accompanies it.

Further, we really can "dissect" the "knowledge" and "information" mentioned before into broad, general categories.  Both represent conceptual fulcrums for the arguments during pivoting political contests.  Knowledge, we may presume, is comprised of structural features which define our Republic -- its history, its organization, its operating mechanisms and, perhaps, even some sort of individual concept of its general philosophy.

Information, on the other hand, is naturally more contemporary.  The contents of this category are conclusions based on applications of the "knowledge" to the immediate challenges and opportunities which are presenting themselves to the Republic.  The voter faces the responsibility of merging the knowledge and information into a more or less coherent model from which reasonable ballot choices can follow.

When all the available components of both knowledge and information have been applied to the immediate moment as well as they can be, a voter among an "informed electorate" is prepared to cast his ballot.

More than enough has been written about the "nuts and bolts" comprising the current political arguments.  Predictably, this present election contest has presented its fair share -- perhaps even more than its normal ration -- of deception, fear mongering, over simplification and outright lies.  Selecting one or another of the most egregious cases of these things has become common fare for what is passing as political discourse.

Discussions of concepts and fundamental issues have largely been set aside in favor of this ever increasing outrage and bluster.  Although ideally this current, agitated  state might be the product of strongly held, thoughtful, political positions of an "informed electorate," MeanMesa grows more and more suspicious that this is no longer the case.

If discussions of opposing politics are no longer simple expressions of the conflict between actual, alternative political positions, what are they?  Posing an answer to this question is the theme of this MeanMesa post.

So, How Do "Political Interests" 
Swing the Electorate These Days?

To simplify this analysis, we can imagine that a typical voter has the equivalent of an almost empty TupperWare container somewhere in his mind.  The "almost empty" part must be stipulated because there will always be a few random things down in the bottom -- a "talking point" or two which seemed especially valuable the eleventh time he heard them, the "no passing stripe" Senator Dry Gulch finally got painted on the highway in front of Aunt Mildred's house or the $5 co-pay reduction on 6 or the 293 billing schedules on his crappy health insurance plan.

As we follow the TupperWare analogy, a political campaign is designed to gradually fill that container with a tid bit here and a tid bit there, a few dangling innuendos, a couple of pregnant, unanswered questions, a few generic promises and a good helping of barely accurate, angrily slung, theoretically possible, mud and character assassination directed at the "other guy."

Day by day, debate by debate, advertisement by advertisement, the TupperWare is gradually filled to capacity with all sorts of things.  Some voters reach the "full" line early in the campaign and then essentially stop adding anything new. Some voters, realizing that their TupperWare is practically empty a few days before the vote, desperately scamper around attempting to add whatever is available so they, too, can stroll into the polling place with their own,  acceptably full, TupperWare.

"Pay Day" comes when that TupperWare container finds its way to a voting booth, the lid is removed and a "catch as catch can" hand full of its contents is removed.  Of course, this vote is then determined by what can be found in the contents of that hand.   Campaigns become so expensive because everything is decided by what comes up with that hand.  For any particular campaign the more "good stuff" the better the election result.

Although this may seem to be a bit caustic as analogies go, we must remember that the voting process has traditionally been somewhat more thoughtful.  We can also note that the sheer volume of persuasive material confronting voters -- each instance with the hope of joining the "contents" of the TupperWare -- has increased exponentially.

When Abraham Lincoln was campaigning for President, the TupperWare containers were essentially filled only by attending speeches, reading newspapers or speaking to one's neighbors.  The messages of a campaign were prepared far more cautiously because, perhaps, the TupperWare could not quite so easily filled when it came time to cast a ballot.

Taking an Equally Cold Look at Voter Demographics

While demographic divisions are usually based on "projective issues" these days -- issues which are both easier to measure and even easier to manipulate as they are exploited for votes -- there may be another interesting metric to consider.  So, what does this possibly mean?

"Projective issues" have to do with the world which is external to the voter.  For example, they certainly include the obvious matters of evangelical beliefs, skin color, economic status and defined or undefined ideological models.  However, the "other, interesting metric" can be a measurement of, you guessed it, the quality of all those additions to the contents of the TupperWare.

In fact, we should also add the state of the voter's information when he reaches the polls to our measurement.  To see this, we must consider the sources of what he has added to his TupperWare along with the reasons he might have been inclined to select those sources.  MeanMesa offers the following little diagram.

In terms of the "state" of the voter, we see that there are, in fact, rather definable categories, each on representing a corresponding percentage of the total voters, but each one also reflecting the specific impact of that category on the election outcome.  Interestingly, the number of voters in a certain categories does not the determine the direct outcome of the ballots cast.  Some categories influence the election not much at all while other categories influence the outcome a great deal, and that influence is not a simple, direct function of the numbers of votes cast by voters in each category.

We can take a look at a few, specific examples,

The "State," Numbers and Influence
 of a Few 2012 Voter Categories

In an attempt to "clear away the fog" a bit, MeanMesa opens the doors to the campaign back offices of the campaigns.  Of course, MeanMesa is not invited to actually visit the boiler room sessions where tactics are discussed, so we'll just have to make do with a few speculations as to what we might have found there. We'll just clip a few of the elements in the diagram for examples.

The first example category:

The "artificially agitated and controlled information" category represents voters who listen exclusively to openly biased information sources.  The information in these TupperWares is actually quite controlled with an endless, repetitive flow of the same kind of issue oriented content.  Because no contradicting content is ever encountered, the credibility of what is received gains an almost unassailable "truth quotient."

We see that the snippets of the red and blue lines from the diagram are almost coincident.  This suggests that the numbers of these voters and the corresponding influence on the election outcome are essentially the same.  The closer the red and blue lines fall for a specific category, the closer the model is to the theoretical "one man, one vote" idea.

In terms of campaigns this is basically a static, dependable block of votes which can be expected to cast ballots in keeping with the very controlled political messaging received.  Further, because there are no "competing messages" in the controlled information, credibility is high and so is dependability.  This category of voters will behave quite predictably in the ballot booth.  

Voters who always listen exclusively to FOX every day, for example, are in this category.  Although profoundly under informed, the voting profiles resulting from such a sole source are rigidly established.  These voters will not "surprise" any observer with unexpected results.  One of the "not particularly factual" things these voters are led to believe is that they comprise a majority in the electorate.

The second example category:

Here we see that the blue line representing the number of voters in this category is significantly higher than in the previous example.  We also notice that the influence [red line] of these voters on the election outcome is slightly higher than the "one man, one vote" idea would suggest from their numbers.

This voting block "fills their TupperWare" from the chaotic information presented on commercial media sources.  We say "chaotic" because, pursuing a commercial interest to appear objective, the commercial media very deliberately hashes what might at first appear to be conflicting positions into a single pot of soup. The priority of "appearing objective" quickly over tops the priority of "actually reporting," resulting in an irritating, yet largely incomprehensible hodge podge of unresolved and unresolvable positions.

Fifty years ago, any major media source worth its oats would eventually have endorsed a candidate as an election approached.  Can anyone imagine one of the modern commercial networks doing something similar?  They have long ago forsaken that brave yet breathtaking moment when they speak editorially about their choice.  Now, these media consider their responsibility met when they continue the flow of perplexing questions not answered and decisions not made right up to the last minute.

This category is the realm of the undecided voter, the fickle independent and the not entirely certain party members.  The infectious fear the networks have for endorsing a losing candidate -- quite beyond any opinion or particular consideration of a candidate's suitability or desirability -- makes the artificial chaos of "reasoned suspicion and indecision" seem the only remaining refuge.  The network fear extends further, too.  Because the tangible reporting is so weak, the media fear the "ratings killing" prospect of "having missed something important."

Predictably, so do the voters who rely on this perpetually unreconciled source of -- by design -- constantly conflicted information.

The third example category:

While this part of the diagram presents the phrase "absorb everything" while describing the political "wonks," there may be some confusion.  We have to assume that "no one can absorb everything."  Perhaps we should say "absorb enough."  When voters in this category enter the ballot booth, they are basically confident that their decision is based on almost everything they needed to know before making an important decision.

This voting block is not criticizing themselves for failing to make an effort to know enough.  Unlike the denizens of the first example category, positions held by these voters have survived the test of conflicting evidence.  Also unlike the first category, voters in this "state" have a "considered uncertainty" -- an unavoidable but acceptable companion to most such reasoned decisions.

We see that the [red] "influence" line is far above the corresponding [blue] "percentage of voters" line for this category.  This is because these voters, equipped with the questions they have resolved about their decision, can influence other voters.  They can be persuasive because their thoughts already contain the resolved product of considering the alternatives to the decision they have made.

The final category in this example shows a tremendous disparity between the actual population of such voters and the influence they wield in the election outcome.  Voters in this category have a firmly resolved voting decision, and they are willing to act in ways which will promote that decision to an electoral result.  Although a small percentage of the total voting population, the influence of these active voters in the election outcomes is large.

A small voting population.  

A disproportionally large influence on election outcomes.

The Parties in 2012

The advantage of the Democratic Party in the coming election is in the number of voters of the last two categories, especially in respect to the willingness of these voters to actively participate in the campaign.  The advantage of the Republican Party is with the concentration of "agitated" and "media reliant" voter blocks  -- voters less inclined to actively promote candidates but with unassailable background information sets.  We can visualize this disparity when we look at this Venn diagram.

The politically active voters are "force multipliers" for Democratic candidates and their campaigns.  The agitated and media reliant voters are, generally, far less active.  They may fervently support their candidates and even reliably vote for them, but they are not as inclined to, for instance, canvass door to door.

Remember, however, this Venn is a diagram shows the distribution of influence -- not votes.  As of now, the Democratic candidates have this advantage.

If YOU would like to influence the 2012 election outcomes, take heed.

Monday, March 26, 2012

Who's Afraid of ObamaCare? Freedom Works

Quick!  Before It Takes Root!

One of the "lurking sharks" in the turbulent seas facing the Republicans is, of course, the Affordable Care Act.  The orders clearly came down to every pundit some time ago.  No opportunity to "re-frame" ObamaCare is to be overlooked.  The negative image of the Act must be repeatedly, relentlessly, inserted in political rhetoric at every turn, in every form of innuendo, as an axiom in economic discussions and even in what passes for GOPCon humor.  

Everybody hates it.  Always has.  Always will.  (image credit)

Now, it should be no secret to MeanMesa visitors that pretty much all the folks who could possibly already hate the idea of available health care, well, already hated it.  This grotesque sliver of the Republican base gobbled up "death panels," federally subsidized contraception, rationed care and the Juggernaut of "entitlements consuming the entire national GDP" long ago -- in fact, all these talking points had been "successfully sold" even long before the bill was passed.

In an election where we see Republicans arrogantly "splitting off" one voter demographic after another, two ideas surface.

The first is that in terms of votes, the Affordable Care Act is a losing proposition for the GOP.  The number of Americans who have found relief from the bill -- or have seen relatives or friends find relief -- is growing, not diminishing.  And, by this stage of the well financed attack on the bill, very few supporters of the Act are switching over to the side which disapproves of it.

There are not that many "undecided voters" or fickle "independents" left to be brought into Dick Armey's camp.  Predictably, almost everyone who is "moving" is "moving" in the other direction.

The second is made clear by this email.  Since Freedom Works and its trained tea bags already represent a dismally static minority of anti-health care votes, one not likely to grow appreciably from its current population, the email suggests that the Freedom Works strategists are anxious to re-agitate their base in hopes that it won't dwindle even more.

We have to assume that there are very few "previously undecided" voters who have not yet formed an opinion about whether they support or abhor the provisions of the Affordable Care Act -- that is, that almost imaginary, fickle block of "still  undecided voters" whose opinions might be swayed by the following email from Freedom Works.

It is a mistake to think that Dick Armey has authorized this "red meat" email in hopes of making Affordable Care poll as less popular.  For one thing, the email is sent only to folks -- such as MeanMesa -- who have, for whatever reason, offered up their email addresses at some point in the past.

[MeanMesa is on that list to satisfy an on-going "curiosity" about just what Mr. Dick may be up to, and, of course, to occasionally spread one of these babies "wide open" on this blog.]

The email from Freedom Works:

Dear MeanMesa,

Last week I emailed you so you could add your name to our petition to End ObamaCare Now by today—the two year anniversary of ObamaCare.

While you were unable to sign at the time, you’ll be pleased to know that over 100,000 patriots have signed our petition, which we just delivered to the Supreme Court.

And although you missed signing the petition, you can still help End ObamaCare Now.

On Monday, the Supreme Court will finally hear the case against ObamaCare and we’re leading the fight with our Constitution Defense Fund. Can you help defend our Constitution right now?

Click here to help defend our Constitution at the Supreme Court!

I’m confident our constitutional challenge of ObamaCare will succeed—with your help.
As you can imagine, such a large-scale grassroots effort is not cheap. But it’s being driven and funded by thousands of grassroots patriots like you chipping in $10 or $25 dollars—whatever they can afford.

There’s no time to waste. ObamaCare goes before the Supreme Court on Monday. It’s critical we expand our grassroots support RIGHT NOW.

Please click here right now and make a donation to support the 100,000 patriots who are rallying to End ObamaCare Now.

Thank you in advance for your generous participation.

In Liberty,
President & CEO, FreedomWorks
Matt Kibbe

Off to the "Totally Constitutional" Opinion of the Supremes
The "drip, drip" you're hearing is someone in a black robe salivating.

The United States Supreme Court, hypothetically, fearlessly searches for "correct applications" of the Constitution to pending legal issues.  The Justices' decisions have never been constrained by popular opinion.  These jurists don't listen to the people; they just concentrate on the Constitution.  The idea is that by doing this, their decisions serve in the interest of democracy, the people and the Republic.

However, just as the Supremes enter a few days of oral arguments about the "Constitutionality" of the Affordable Care Act, we confront another example of the "soiled remnants" of the autocracy's penchant for selling its soul to the highest bidder already in place.  Chief Justice John Roberts has already "toughed" his way through serious conflicts of interest charges, here, most notably, in his dubious service to, wait for it, wait for it, a suspiciously lucrative, friendly health insurance corporation case during his first days in his new job.

Is it a just another case of MeanMesa's geriatric ranting and raving?  Here are four easy links to come up to date with the question if you're interested. There are pages and pages more of them on your Google.

Huff Post Business: Supreme Court Justices John Roberts And Samuel Alito Sell Stocks To Reduce Conflicts Of Interest
Committee to Expose Dishonest Judges
The People Versus John Roberts
Salon: A conflict of interest for John G. Roberts?

The Affordable Care Act Is Not Just Treading Water

Finally, if the Affordable Care Act had taken the shadowy course of many other bills passing through Congress, that is, if it had quietly disappeared into a few dozen law suits, an apathetic implementation regime or had simply turned out to be nothing more than temporary "smoke and mirrors," the Republicans wouldn't be so agitated with it.  Unhappily for them, it hasn't.

Instead, we find the Act still moving forward like a wounded battleship. Yes, it has been the target of immense "cash attacks" and more than a little "stellar repackaging" by the Congressional and media servants of the insurance industry, but it's still there -- and the crew keeps repairing the latest damage, too.  In fact, it is rapidly approaching its first "firing locations" from which it can effect substantial and visible benefits to voters.

Of course, the parasites and their minions find this terrifying.

Take a look at a rather nicely comprehensive article from The Daily Cos(The links are left enabled.  Read the whole article here.)

some shocking Obamacares facts

Fri Jan 20, 2012 at 03:45 PM PST

Everyone in 2014 will be stunned once Obamacare kicks into full gear. Pass this around for the 2012 election.
1. There will be non-profit insurers offering health care plans in the exchanges on top of traditional private insurers (regulated STRONGLY by the health care law). The public option never really disappeared. It was just replaced with non-profit language that will turn into non-profit options just as strong as the proposed public option. Besides, many states are integrating public options into their exchanges.

2. Medicaid will be significantly expanded to 15 million poor uninsured americans in 2014. People in deep poverty will have significantly better lives. Everyone at less than 133% of the poverty level  will be covered under medicaid. Native Americans will be insured for the first time in their lives and will enjoy modernized health care. The Indian Health Care Act is reauthorized and strengthened by this medicaid expansion.

3. Medicare's trust fund will be extended 12 years. Seniors have free preventive care and check ups. Lots of money have been saved through waste trimming and fraud recollecting.

4. Small business tax credits will have their amounts magnified for small businesses in 2014. When juxtaposed with the strongly regulated exchanges, coverage will be very affordable for small businesses.

5. For everyone up to 400% of the poverty level (millions and millions of americans are under this category), huge tax credits will be available to help them afford coverage. Those who already have insurance qualify too, not just the uninsured. This is a HUGE middle class tax cut. Financial situations will improve drastically for Americans because of the fact that kathleen sebelius has been issuing robust regulations on insurance companies such as a robust 80-85% medical loss ratio.!   (explains the huge tax credits)

6. Preventive care will be free in all insurance plans eventually as all plans lose their grandfathered status.

7. Single Payer is coming to America because of obamacare. Kathleen sebelius gave a huge grant to Vermont to build single payer in the state. The vermont delegation was so happy. Vermont is using the affordable care act money to build single payer. No affordable care act, no single payer for vermont and for the country.

8. Community Health centers will be invested on and will significantly impact health care for the better.

9. The rich people start paying their fair share as promised by Obama in 2013. Payroll taxes on people earning incomes of 250,000 dollars go up. It was a key element in the payment mechanism of the bill. The Bush tax cuts for the rich will expire at the end of this year too. :)

Originally posted to sreeizzle2012 on Fri Jan 20, 2012 at 03:45 PM PST.

Also republished by I Vote for Democrats and ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

Wednesday, March 21, 2012

An Apple Reader - iPad$, iPhone$ and iWorker$

Big Profits Bring Out All the Advice

Of course, total failure also tends to bring out plenty of advice, too.  

However, Apple's announcement of startling profits, possible dividends and even a big pile of cash in the bank didn't really catch anyone by surprise.  The iPad and iPhone stories seem to be the newest addition to Adam Smith's Wealth of Nations. Dr. Smith's central arguments of division of labor and industrial advantage have matured remarkably since his death in 1790. (From Wiki: The Wealth of Nations)

Although this MeanMesa post is not specifically about the corporation's good fortune, the proposition presented here still requires a glimpse at the "big picture" of current conditions.  The volume of recent "news" about the business is predictably large.  With corporate profits in this scale, every analyst is infatuated with the possibility of breaking out with some new "cleverly expanded subtlety" which had been overlooked by his competitors.

In keeping with the "Primer" idea in the title of this post, we can review a little of three interesting accounts of this business phenomenon.  

1. CNN - The CNN article outlines the general story concerning the announcement of profits and dividends.

2. A very nice, scholarly paper (from the University of California, Irvine & Berkeley, and Syracuse University) titled "Capturing Value."

3.  A quick "taste" of the public image problems Apple Corporation has encountered with respect to working conditions in its supplier factories in China.

1. The CNN Story
Take a look at a few excerpts of the CNN report about the company. (Read the whole article here.)

Apple announces dividend and stock buyback
NEW YORK (CNNMoney) -- Apple on Monday announced plans for much of the $97.6 billion in cash it has accumulated from massive iPod, iPhone, iPad and Macintosh sales.

The company said it would begin giving shareholders a quarterly dividend of $2.65 per share sometime its fiscal fourth quarter, which begins in July. Apple last offered a dividend in 1995.

Apple (AAPL, Fortune 500) will also buy back $10 billion of its own shares over three years, beginning in October.

"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure," Tim Cook, Apple's CEO, said in a prepared statement. 

- ... -

The company said it expects the dividend to cost the company $2.5 billion per quarter, making it one of the largest dividend payers in the United States. Combined with the repurchase program, Apple said it will likely utilize $45 billion of its domestic cash through 2015. 

It's significant that Apple is using its domestic cash, rather than the much heftier stockpiles it holds overseas, because foreign cash would be subject to a sizable "repatriation tax" if brought back into the United States. Cook said the company didn't want to pay that tax.

- ... -

"Investors have been wresting with the question of, 'Who is left to buy the stock?'" said Alex Gauna, tech analyst at JMP Securities. 

Cook said he hopes the dividend will open up Apple's stock to a new investor base. 

Apple's dividend yield -- the percentage of a company's share price that it pays out in annual dividends -- is currently 1.8%. That's higher than the dividend yields of other technology giants, such as IBM (IBM, Fortune 500), Cisco (CSCO, Fortune 500) and Oracle (ORCL, Fortune 500), but it's lower than the yields of more direct rivals like Microsoft (MSFT, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500).

Apple's dividend yield is nearly twice the average for the tech companies in the S&P 500, but a bit less than the 2.1% average for the overall S&P 500.

2. Capturing Value in Global Networks:
Apple’s iPad and iPhone

This very readable and scholarly paper analyzes the distribution of Apple's costs and profits with respect to iPad and iPhone sales.  (Read the whole paper here.)  The entire paper (8 pages) is fascinating!  While reading through this remarkably objective economic analysis of Apple, the iPhones, the Apple supplier, FOXCONN, the wages of Chinese workers, the sources and destinations of Apple profits and even the wide spread of Apple costs, a very new picture emerges.

Capturing Value in Global Networks:
Apple’s iPad and iPhone
Kenneth L. Kraemer, Greg Linden, and Jason Dedrick
University of California, Irvine, University of California, Berkeley and Syracuse University

It is unexpected, but this is not the picture that MeanMesa and many other Americans had developed about Apple's business practices.  You are encouraged to spend a few minutes with this paper.

Here are a few excerpts from the paper.

from page 3:
Who captures the financial value?

Like the iPod, the iPad and the iPhone are big money makers for Apple. While other companies are thrilled to be part of the supply chain for these highly successful products, their benefit in dollar terms pales in comparison to Apple’s. Among countries, China’s economy continues to play a surprisingly small role in comparison to the U.S., Korea, Japan and Taiwan.

In the case of the iPad, Apple keeps about 30% of the sales price of its low-end $499 16GB, Wi-Fi only model (and more if the unit is sold through Apple’s retail outlets or online store). We estimate that Apple keeps a healthier 58% of the sales price of the iPhone 4. In both cases, these are far greater than the amounts received by any other firms in the supply chain.

- ... -

The iPhone also benefits from the fact that the price received by Apple, at least until the recent availability of “unlocked iPhones”, is not paid directly by the consumer because of a subsidy offered by the carrier in exchange for a contract. This brings us to the question of whether carriers exert market power over handset suppliers as we anticipated. Our analysis [5] of the smartphone value chain showed that carriers in fact earn gross profits over the life of a typical 2-year contract several times those earned by handset vendors. This suggests (and industry analysis further supports) that the carrier’s primary market power is exercised over its subscribers. The carrier then negotiates over the distribution of the resulting profits with handset suppliers that can help it to attract and retain subscribers.

After Apple, the next biggest beneficiaries in the iPad and iPhone supply chains are Korean companies such as LG and Samsung, who provide the display and memory chips, and whose gross profits account for 5% and 7%, respectively, of the sales price for the iPhone and iPad.3 U.S., Japanese and Taiwanese suppliers capture 1-2% each. But overall, the story remains the same, with Apple’s success benefiting its shareholders, workers, and the U.S. economy more generally.

The two charts below show the breakdown in detail. In each case, we provide the geographical distribution of the gross profits received by the first-tier suppliers. We break down the remaining cost of inputs into materials and labor.

The main difference between the two charts is that the iPhone, shows no amount for “Distribution and retail” because Apple is paid directly by a cellular company, such as AT&T or Verizon, which then handles the final stage of the sale.

The role of China

It is a common misconception that China, where the iPad is assembled, receives a large share of money paid for electronics goods. That is not true of any name-brand products from U.S. firms that we’ve studied. The breakdown of value in these two iconic Apple products shows why.

First, our assignment of profits (which exclude wages paid) to first-tier suppliers is based on the location of their corporate headquarters. There are no known Chinese suppliers to the iPhoneor iPad. The iPhone and iPad are assembled in mainland China factories owned by Foxconn, a Taiwan-based firm.

That means that the main financial benefit to China takes the form of wages paid for the assembly of the product or for manufacturing of some of the inputs. Many components, such as batteries and touchscreens, receive their final processing in China in factories owned by foreign firms. Although hard facts are scarce, we estimate that only $10 or less in direct labor wages that go into an iPhone or iPad is paid to China workers. So while each unit sold in the U.S. adds from $229 to $275 to the U.S.-China trade deficit (the estimated factory costs of an iPhone or iPad), the portion retained in China's economy is a tiny fraction of that amount.

3. Dividends Emerge in Pressing Apple 
Over Working Conditions in China

Even before Apple's profit statement, iPad and iPhone consumers were beginning to be concerned about working conditions in the firm's supplier factories.  These are excerpts from a New York Times, "Business Day,"  article reviewing protests focused on working conditions in a major Apple supplier, FOXCONN, in PRC.  (Read the entire article here.)  

Dividends Emerge

in Pressing Apple Over Working Conditions in China


Beck Diefenbach/European Pressphoto Agency
A protester, Dana Johnsen of Santa Clara, Calif., outside Apple's shareholder meeting last month in Cupertino

The American sweatshop opposition movement was born the day we discovered how our Nikes were stitched together. Two decades later, we are discovering how our cherished iPhones are made, giving Apple a “Nike moment” of its own.  

Worker suicides at Apple’s main Chinese supplier, Foxconn, in 2010, followed by reports of forced overtime, child labor, minimum wage violations and unsafe working conditions at its suppliers, have contrasted with Apple’s status as creator of hallowed devices and its spectacular $13 billion in profit — 30 percent of sales — in the first quarter. 

The reports have fueled a budding protest among students and labor unions who call for Apple to compel its suppliers in China to improve the conditions for hundreds of thousands of workers who assemble its products — workers whose wages contribute a mere $10 to the cost of a contract-free $549 iPhone 4. 

But if the troubling conditions at Foxconn’s assembly lines raise anew fundamental questions about the responsibility of corporations in this age of global capitalism, the outcry raises a basic question too. Does pressure by consumers and governments in the West to improve multinationals’ behavior in poor countries do more harm than good? 

Sweatshop opposition in the past offers limited hope. But Apple is different in some ways than the garment and shoemakers of earlier campaigns. Its high profile and deep pockets suggest that consumer pressure might indeed effect change for workers at Apple’s suppliers in China. 

- ... -

This poses a quandary for would-be activists in the West. They see their task as convincing multinationals like Apple that whatever the cost of improved working conditions at its suppliers’ plants, it is less than the potential cost to its reputation of allowing workers to toil in sweatshop conditions. But they must not forget that the No. 1 priority for most of Foxconn’s workers is to keep their job. While outside pressure might improve their lives, it could also persuade Foxconn to replace them.  

- ... -

Consumer pressure and bad publicity have already led Apple to make some big changes. In 2005 it created a code of conduct for its suppliers, monitored regularly. Last month it became the first electronics company to join the Fair Labor Association, a group set up in 1999 by companies, universities and nonprofit groups to monitor working conditions at garment makers in the third world. Over the last two years, Foxconn has announced repeated wage increases at its plant in Shenzhen. 

These are early days. Who knows, if activists keep up the pressure, they might help lead to significant improvements in the lives of Foxconn’s workers and make us feel better about how our iPhones are made.

 A MeanMesa Suggestion for Apple

Today, a profit reserve of almost $100 Bn, plans to distribute some of that profit as dividends to shareholders and long range "buy back" policies fill the picture of Apple as a corporation.  Considered from the point of view of an executive strategy for the company, all these factors practically glow amid a still dismal national economy which is still only tentatively parked in the hall way outside the ICU.

At first glance, it looks very much like the "rising tide is, in fact, lifting all boats," at least all of the boats tethered close within the ownership of the company.  But, it is right here that a remarkable opportunity can also be found, an opportunity for "boats" tethered a little further from the corporation's board room.

A cursory look at the numbers reveals a little more about the "opportunity."

Let's say that there are 10,000 China workers at FOXCONN and other PRC Apple supply chains.  10,000.  The corporate management has already indicated that they are prepared to "utilize" $45 Bn of its domestic cash reserves between the dividend and the buy backs.  Looking closer at the $45 Bn figure,


we can see that it represents 45 thousand million dollars.

If Apple, partly out of decency, partly out of the hope of inspiring supply chain workers to even more efficiency and partly out of trying to calm the growing "sweatshop" criticism were to write a check for $500 to every one of those factory workers, a solution to a number of looming problems and another collection of intangible, but possible, future benefits might materialize over night.

10,000 workers X $500 each = $5,000,000 

Now, although this sum certainly seems like a lot of money to MeanMesa, Apple's check book [for dividends and buy backs] balance would still remain at $45 Bn - $5 Mn, or


or, 44 thousand 995 million dollars plus a quieter consumer market and a string of corporate suppliers with an eager, energetic work force.

Get the idea?

Monday, March 19, 2012

The Stockton Problem & the MeanMesa Solution

Nothing Personal, Just Making an Example

The City of Stockton, California, is reported to be at the brink of declaring bankruptcy.  Naturally, the commercial media "news" is making every effort to "spread the fear" among residents of any other city which may be facing a similar necessity in the future.  (Read an article here.)

There may, in fact, be an unexpectedly long list of municipalities across the country which presently face this fate or may soon face it.  Conditions vary.  In some regions the Great Republican Recession of 2008 has actually only caused minor economic difficulties, but in others, the impact has been grave.  Those teetering on the edge of bankruptcy this early in the cycle -- cities such as Stockton -- offer a glimpse into both the fundamental causes of "being so vulnerable" and the likely flow of "inescapable consequences" representing the effect of that vulnerability as the consequences gradually become material.

This could be a post which concentrates on the details of this "cause" and "effect" phenomenon, but it is not.  This post is, instead, a "doubling down" repetition of a MeanMesa idea which seems to have never excited the interest which it might deserve.  Events in Stockton present an excellent opportunity to demonstrate this idea.

Of course, it would be quite nice indeed to be offering up some sort of quick solution to the dilemma, but that is not the point.  What is offered here is a possible course which might well prevent similar catastrophes.

The "Perfect Storm"

If we had taken a look at the financial plan of Stockton in 2007, we would not have noticed much which forewarned on the city's dire state in 2012.  However, the five years between 2007 and 2012 brought incredible, unanticipated external forces to bear on the city and its economic plan.  In 2007 city planners had undertaken a very routine collection of development tasks, none of which could be particularly criticised as an "over reach."  

There were a couple of bond financed projects, notably an athletic stadium and a small boat harbor, both of which seemed thoughtful and promising.

Ambitious and optimistic?  Yes.  Over reaching?  Not particularly.

Likewise, the "day to day" financial profile of 2007 Stockton was similarly non-provocative.  Labor contracts with city employees may have shown a bit of the "enhanced generosity" which is typical to California municipalities, but nothing outrageous.  City maintenance and operation costs might have been considered a little high for a conservative farm community in Idaho, but for a relatively healthy city of 300,000 in California, they were also comfortably close enough to normal.

In 2007 the whole economy of the city was puttering along at an acceptable level, too.  The main elements of sustainable growth, reasonable appreciation of both commercial and residential real estate and fairly good prospects for additional investments and jobs were a solid foundation for positive estimates of the city's future health.  City property tax revenues, while not the best in the state, were still quite "doable." 

Charts and Graphs

Right here, we can take advantage of significant research from a variety of sources.  Probably because of Stockton's unenviable future prospects, a good body of data is available about the city economy's recent past.  Take a look.  These are presented here as "background information" for the proposition which follows.  Several are dated from a year or two back and some topics are not covered, but this collection still shows many, convincing dimensions of the "perfect storm."

The economy of the whole world -- especially with current examples in EuroUnion countries such as Greece, Ireland, Portugal and Italy -- tells this same story on national scales.  Immediately at the first hint of troubles, every destructive idea of austerity and economic contraction -- no matter how thoroughly disproved in the past or simply "road weary" from over use and consistently bad results -- rushes to the forefront of "plans" to mitigate such disasters.  These will inevitably be appearing momentarily as "absolutely necessary, unavoidable solutions" for the "Stockton bankruptcy problem."

The MeanMesa Suggestion

Reviewing the diagrams above, it is clear that Stockton "started hurting" as the shamefully unregulated, rampaging Bush housing bubble began to shatter.  With home prices careening to unimagined lows, banks eagerly foreclosing mortgage assets right and left, unemployment increasing and incomes plummeting for those who still had jobs, Stockton's "property tax take" became abysmal. 

Now, there were plenty of other factors "waiting in the wings," all ready to add their own pain to Stockton's problems.  However, way down at the fundamental level of the crisis, the vaporizing property tax revenue was the boot on the city's throat.  If the devastating effect of this sudden reduction in city revenue could have been avoided, the other factors might have been survivable.

We see two primary factors at play in Stockton's property tax problem.  Both are -- and will continue to be -- inevitable so long as the existing property laws remain in place.

1. The "Connection" Between Property Ownership and Property Taxes
2. "War Profiteering" from Tsunami Waves of Foreclosures

Let's take a closer look at each.

1.  The "Connection" Between Property Ownership and Property Taxes

The typical arrangement for the payment of property tax is no secret to anyone who has ever owned a home.  There is a property appraisal to establish the value of the property.  The local government establishes an annual budget for the operation of the city.  The budget is totalled, and the property appraisals are totalled, then the sums are divided yielding the property tax rate.  Shortly after this, property tax bills are sent to property owners for payment.

However, when properties are foreclosed, theoretically "no one" owns the property.  The foreclosed property is no longer a part of the appraised "tax base" of the city, immediately reducing property tax revenues.  Look at the charts.

This presents an interesting "disconnect."  

MeanMesa asks why the bank which foreclosed the property is not the "new owner" and liable for the property tax payments while the property is in its ownership?  If we stopped right here, MeanMesa would be able to hear the howls of Stockton's eager foreclosure "owners" all the way out in Albuquerque.  Rush Limbaugh would probably even get around to saying something about the plan.

Move the process of paying property tax into being an addition to the mortgage payment.  Every mortgage payment includes enough "extra" to pay the property tax at the end of the year.  When the home owner is foreclosed, and the property is once again owned by the bank, the property taxes continue, but they are paid by the bank.

Stockton might have less money, but Stockton won't wind up with no money.

2. "War Profiteering" from Tsunami Waves of Foreclosures

If you live in Saudi Arabia, and part of your "portfolio" includes a nice chunk of the securitized mortgage packages which were on sale during the Bush autocracy, you don't actually care very much about neighborhood schools, roads, bridges and police cars.  You may not even care that much about foreclosures -- they may be a little dark at the moment, but when the economy comes back, you'll wind up owning a bunch of valuable houses.

And, you won't be the only one in the chain to make money.  As Stockton collapses, flirting with austerity and privatization schemes, more folks will have a chance to buy stadiums, bus lines, city property and even entire subdivisions at "bargain basement" prices set by desperate city councilmen.  If you've got enough dough to out last the recession, you'll come out of it "smelling like a rose."

But, but, who has enough dough to out last the recession?

Try to remember.  Just at the end of the autocracy, American banks received an involuntary "blood transfusion" of tax payer money.  Since banks make money by having money, most of these banks, predictably, did just swell with the sudden infusion of cash.  Further, they didn't "do well" in a normal way for banks.  They "did well" because they were throat deep in capital right in the middle of a very convenient recession.

They are still, to this very day, "doing well" at an unprecedented level, and, of course, cities such as Stockton have been led to the slaughterhouse to help them "do well."

If the new owners of foreclosed houses had to pay property taxes, they would become very interested in whether or not the neighborhood was sustaining the value of their "new houses."  Believe it or not, the bankers might even be interested in trying to help keep house prices high in the first place.  Foreclosure mania would cease to look like free candy.  Good business might include doing whatever was possible to even, wait for it, prevent foreclosures!

In bad times, initiating this plan would be political suicide.  But in good times, the transfer of property tax payments to become part of mortgage payments would be painless and invisible.

This might not help Stockton all that much, but what about your town or city?

Friday, March 16, 2012

A Note to Obama: Don't Let Loose Ends Become Frayed Cuffs

Low Hanging Fruit in the anti-Obama Media War

Lots of the "mouth junk" issuing from the born liars in the GOP "clown car" never gets any particular traction with the fear weary electorate.  However, even the perennially optimistic MeanMesa has days when tuning into the media "news" feels like standing in front of an "out-of-control" drunk with an angry scowl and a baseball bat.

Still, fortified by a overly brave, perhaps foolishly steely heart, MeanMesa, jabs the remote's "on" button, tuning in for the "news" about the latest hateful, hideous thing the Republicans are saying and the latest hateful, horrendous thing they are trying to do. The only mystery left in the GOP's grisly "Brothers Grimm Collection" is how many chapters still remain unread in their story book of nightmares. (original Grimm's Tales - National Geographic)

However, as was mentioned before, some of the crafty GOPCon "attack strategy" schemes do seem to have some traction.  While there's little need to go chasing after any specific pack of the ineffective part of the engineered lies, distractions or innuendo thrusts, the ones which seem to be working, that is, the ones which seem to be able to gain some political traction among the voting public, should be actively countered right away.

If this "countering" is neglected or delayed, these little schemes gain the advantage of "being repeatedly presented as facts" long enough to mysteriously become more material than they deserve to be.  Once this has occurred, these arguments are granted passive residence in an ethereal world where they, gradually, become ideas no longer subject to examination.

They become unexamined, mistaken certainties.

Republicans, now permanently soiled with the enduring curse of their own record of governing, prefer this approach.  They are understandably abhorrent when confronted with the prospect of political discourse based on a comparison of their records with those of the current President, hence, furtive, artificial mental structures become the currency of their ambitions for office.  [For example, a majority of Republican primary voters think that Barack Obama is a Muslim.]

This MeanMesa post is about two current specific "propaganda gambits" which seem to be gaining traction.  Notably, in this case, two others which seem to be effective right now have been set aside.  Those "set asides" would be political attacks based on the price of gasoline and the political festivities currently at play in favor of beating the war drums with respect to Iran.

Happily, for some reason, both the "gasoline question" and the "Iran question"  seem both temporary and too well lubricated by common sense to qualify as having traction.  The propaganda represented by the two themes of this post are not, apparently so well lubricated.  Let's take a look.

Obama the Spendthrift (image source)

1. Obama's Spending Just As Much As Before
Deficit Spending for Economic Recovery

Because they found themselves unable or unwilling to propose or pass any legislation which would have assisted in lowering the unemployment rate,  Republicans in both chambers launched into a well funded campaign to reframe the unemployment problem into a debt problem.  The scheme was simple enough.  A new paradigm had to be installed in the electorate where somebody else caused the debt, and the debt caused the unemployment.

Because Americans think of national debt in the same sense that they consider household or personal debt, the national debt was instantly terrifying.  When the insecurity of the recession job market could be transferred to debt and then to spending, the scene was set for what we saw beginning in 2010 and since then.

Obama has actually done extraordinarily well with both spending and the debt.  However, the "low hanging fruit" of uniformed voters were convinced that he should have cut spending to the quick -- no matter the consequences -- to pay back the debt and, of course, usher in dramatic job creation.  The entire picture, although carefully crafted, is not more than 1/8 of inch deep at its best places.

This is a problem for the President.

The facts aren't a problem, but the perception of those facts is.  A majority of voters from both parties see the present dilemma in exactly this light.  It gets worse.  If it were possible to extract an intuitive understanding -- one, of course, already heavily manipulated by the GOPCon campaign to paint the picture this way -- of what voters could have expected, that "picture" would include the serious, yet unrealized, expectation of spending cuts.

When there were none of the expected spending cuts, some of the rest of the propaganda campaign began to have traction.  The new narrative?  Obama just "plowed ahead" with typical Democratic big spending habits, and when the box car of reality hit, he wanted to raise taxes.  The Republicans packaged this advantage in all the predictable costumes, many of which didn't really penetrate well, but the main "big picture" pitch did penetrate.

This is the first of the two torpedoes facing the re-election campaign today.  The uncontrollable, reactionary tea bags in the House have already trotted out the "both sides are the same" scenario as they made up their list of Republican incumbent targets.  Facts mean nothing.

Writing a New Narrative

The "car in the ditch" narrative was worth its weight in gold.  Everyone -- including the low information voters -- understood it.  But, is there another chapter in that book which can address the deficit spending?  Perhaps.  MeanMesa would like to take a jab at one.

 The Old, Corner Grocery

Hoping to land a position as the new manager of the grocery, the job candidate went to an interview with Grandma Sullivan, the owner.  The previous manager had been her nephew, but conditions at the grocery had taken a serious turn for the worse under his management.

After a few stories about the "old days," she gave the new man the keys.  They agreed that he should start the next morning.  She told him that all the records were in a box under the cash register.

However, on his first day at work, the new manager was shocked by what he found.

Looking through the records, he realized that the grocery had no money in the bank, had terrible credit and was, in fact, deeply in arrears with all of its suppliers.  Glancing around the store, he also saw that there was basically nothing for sale.  The shelves were empty except for some ten year old cans of sardines from Burma, a few out of date tins of oatmeal and a few dusty packages of Twinkies.

To his further horror, he discovered that there was not even any cash in the register.  There were a few threatening letters from the bank about past due loan payments.  There was no heat or electricity in the store, and there were certainly no customers.

Meanwhile, however, the previous manager seemed to be doing suspiciously well for someone who had just lost his job. He was supervising the installation of his new swimming pool.

Of course the new manager had to borrow even more money to start the business again.

This explains Obama's budget deficits.  It is a story which needs to be told to millions of voters who still have no idea what actually happened.  The situation can be greatly improved if Obama's current overly mild narrative moves beyond "the worst financial crisis in generations" to another, new story which includes names, actions and  dates.

Many of the culprits are still seated in the Congress.  The Republicans must be made to pay the full price for their record.  This hasn't happened yet.  If it doesn't happen pretty soon and pretty decisively, MeanMesa thinks that the election could be in trouble.

2. Obama Is Owned by Wall Street
He's Supposed to Lose the Election by Excluding Big Donors

Obama the Wall Street Parasite (image source)

Amazingly, this second well engineered pitch bothers Republicans almost as much as it bothers Democrats.  After a good thrubbing during the unbridled years of the autocracy, most non-Wall Street Americans are still walking around as bow legged as the Prom Queen after a gang rape.  No one likes Wall Street or banksters.

Of course, this popular distaste has no material effect on the actual connection between the top enders and the Republicans, but it has made the importance of "disguising that connection," well, even more important.  In some cases, the GOP's have had to expose their quiet, yet undying fealty to the big guys, for example, in their frenzied efforts to reframe and destroy things like the new Wall Street regulations, the newly formed FTC Bureau of Consumer Protection and the Dodd-Frank Bill.  

Remarkably, even in a media swamp of such blatant manipulation, the majority of voters has still managed to point the finger of blame where it belongs.  So, let's talk briefly about a GOP Super PAC commercial running in Albuquerque, New Mexico.

First, for MeanMesa visitors unfamiliar with the local environs of MeanMesa's Galactic Headquarters, a word about Albuquerque and New Mexico.  None of this is presented as a tourist guide, but rather it is included here because not only is the message an unusual prelude to a "yet to be nominated" candidate's campaign, it is also simply such an unlikely place to be spending money this way.

New Mexico is not Mexico.  It borders on Mexico to the South, but it also borders on Arizona to the West, Colorado to North and Texas to the East.  New Mexico voted for Obama in 2008, and even the heavily biased Rasmusson Poll shows Obama strongly favored in 2012.  

We have a shady Republican woman for Governor, although she is nothing compared to the out-of-control "red meat" harpy to our West in Arizona or the strange, drawling, little ex-candidate to our West in Texas, Rick Perry.  We have elected two Democratic Senators and a respectable number of Democratic House members.

So, why is a well heeled Super PAC paying for anti-Obama commercials in New Mexico?  Also, interesting, what is the theme of those negative advertisement buys?

The answers to these two questions reveal the exact reason why they are posted here.  Both answers show us the inner, tactical workings of the GOP Super PACs and give us a glimpse of their strategies for winning the White House in 2012.

First, the commercial.

The commercial begins with a video clip of President Obama saying that he is not in office to "benefit a bunch of fat cat bankers."

Following the clip, the commercial presents communicative graphics "revealing" that the Obama campaign has received millions of dollars worth of contributions from Goldmann-Sachs.  It continues with a quick recap of the Wall Street "heavy hitters" who have been appointed by the President to a good number of slots in the administration.  The "factual" information presented is relatively accurate compared to similar Super PAC advertisement currently deployed, for example, in contested Republican primary states.

This would be a truly academic exercise if clearly detectable "target biases" were not included in this post.  So, what, exactly, does this free spending Super PAC want New Mexico voters to "start thinking" or, at least, "start suspecting" as a product of this media purchase?

The answers are clustered in a list of descending priorities.

Of course, the first and most obvious among the implied messages is that Obama is making decisions for the benefit of the 1%er's.  

The second most sought after message is one of stoic hopelessness, that is, the idea that "nothing changes."  Regardless of party, promises or platform, an American voter can do nothing about getting the brokers' and banksters' lobby out of their tax money.  Obama may have said that he wanted change, but, in fact, he didn't really want change at all.  He just wanted to trick voters long enough to get to the trough.

The third is perhaps the most subtle, but also the most potentially useful given the nature of what has been revealed in the Republican Primary candidates.  That message is that "both parties are the same."

Hmmm.  "Republicans are just like Democrats?" 

Think carefully.  Why would a GOPCon Super PAC spend money to promote an idea like this?  Certainly not because they want to "fire up their base" or convince Democrats or Independents to vote against the President.

This is a message targeted at totally disheartened nihilists.  These are the folks who have forsaken all hope that any possible solution might still lie somewhere on a 2012 ballot.  The Super PAC money is an expression of the belief that this demographic block of disenchanted voters might represent the final "edge" needed to elect  an otherwise unelectable GOP nominee.

In New Mexico, the logical destination for voters with such a dark, depressing outlook would be GOP Senate hopeful, Heather Wilson.  Karl Rove has already been here to attend a fund raiser for her.

Both nationally and in New Mexico, the wing nuts have been in a well financed "take no prisoners" mode since 2008.  When it became clear that they couldn't really sell the "zero sum record" of the Republican Party to disgruntled voters, we saw an unmistakable "tea bag desperation" message emerging with a constantly increasing, although somewhat mystifying, crescendo of broadcast energy.

In fact, the "both sides are the same" theme has been getting a great deal of attention from the GOPCon money men.  Hardly a day flies by when a talk show caller -- from either end of the political spectrum -- doesn't dutifully mouth this same hopelessness and futile acceptance of the "We're all so-o-o screwed." message.

New Mexico's Republican Primary election isn't even scheduled until June 5.  Clearly, the Super PAC media buy is designed to "test the waters," seeking out some sign of possible traction for these three themes.  The point of this MeanMesa post is that there is a little traction.

Further, that traction is found mainly only among the saturated, cynical depressives, not among moderately ambitious Republicans, not among moderately hopeful Democrats and not even the still breathing, still fickle Independents.  When GOP PAC cash starts to target the voting group identified primarily by hopelessness and despondency, it implies that campaign strategists having reached the conclusion that this bunch might be at least a fleeting chance to prevail in the general election.

None of these represents an intractable challenge for the Obama campaign or for the Democrats running in New Mexico.  These will only become intractable if they are allowed free range to grow unchecked.  

So much for MeanMesa advice.