Blogs

Why inflation isn't the problem

With the release of today's January 2008 CPI showing a yearly reading of 4.1%, inflation hawks are certainly out in force in the blogosphere. While I certainly agree that the average American family has faced a vastly increased burden purchasing food, gasoline, and medical care, I do not think it is inflation itself that will be the problem going forward in 2008. Below I explain why.

Below is a graph showing how inflation tends to play out over economic cycles. The blue line is consumer inflation (cpi). The red line is producer inflation (ppi) which is the rate at which costs are increasing to producers. The green line is household debt.

What is WTO GATS Mode 4?

Submitted by on

GATS stands for General Agreement on Trade and Services. This is a treaty under the control and part of the WTO .

The GATS defines four modes of trade in services. Mode 4 refers to the temporary migration of workers, to provide services or fulfill a service contract. Because the current framework of Mode 4 allows for only temporary movement of workers across borders to provide services, and their visa as well as their right to stay and work are tied to their original terms of employment or contract and to their employer.

The WTO is basically negotiating a global guest worker program.

TATA earns $120 Million Contract with Chrysler

Submitted by on

Just last week, the news was filled with the announcements of huge layoffs among UAW members at Chrysler. The UAW planned to file complaints with the National Labor Relations Board because it seems Chrysler was shedding the American workers while maintaining the H-1B workers ( foreign workers here on guest worker visas).
It did not take TATA Consultancy Services (TCS) long to begin bragging of their latest deal - a contract with Chrysler worth $120,000,000.

TCS in $120 mn Chrysler deal
BS Reporter / Mumbai February 21, 2008
IT major Tata Consultancy Services (TCS) has signed a multi-year contract worth $120 million (around Rs 480 crore) with US automaker Chrysler.

TCS will deliver application maintenance and support services to Chrysler. The IT services initiative will encompass a portion of the functional areas within Chrysler such as sales and marketing and shared services.

Real Weekly Wages Plunges in January

Submitted by on

Real weekly wages plunges in January, down -1.4% yr/yr adding more stress to deeply indebted households

The BLS reported today that average seasonally adjusted weekly wages fell another -0.5% behind consumer price increases in January with wages now able to buy -1.4% less than they did one year ago. Weekly wages fell in four of the past five months since last August. Average real weekly wages are now again lower than they were in January 2002…and in January 1981 when the irresponsible debt and deregulation ideology took power.

wages plunge, comparison of Jan. 07 to Jan 08

Unpublished

Rising Above The Gathering Storm

This is a blog I wrote last year.

EXECUTIVE SUMMARY

CHARGE TO THE COMMITTEE
The National Academies was asked by Senator
Lamar Alexander and Senator Jeff Bingaman of the
Committee on Energy and Natural Resources, with
endorsement by Representative Sherwood Boehlert and
Representative Bart Gordon of the House Committee on
Science, to respond to the following questions:
What are the top 10 actions, in priority order, that
federal policymakers could take to enhance the sci-
ence and technology enterprise so that the United
States can successfully compete, prosper, and be
secure in the global community of the 21st centu-
ry? What strategy, with several concrete steps,
could be used to implement each of those actions?

Page 8
BEST AND BRIGHTEST [where have we heard that before? Google it.]
IN SCIENCE AND ENGINEERING HIGHER EDUCATION

RECOMMENDATION C: Make the United States the

OPIC - Overseas Private Investment Corporation

We have all heard of the Export / Import Bank (EXIM). We have heard of vague references to trade manipulation, balance of payments, debtor nations, World Bank, World Trade Organization (WTO), violent protests around the world, including Seattle (who were those people?), etc. Few have heard of OPIC. Overseas Private Investment Corporation is a department of the United States Treasury. Immediately you may wonder why “Private” and United States are associated in the same sentence. I was curious. It’s exactly what you think.

Mayor Bloomberg's weird logic

The headline on Huffington Post sounded promising: Bloomberg Rips Government Over Failing Economy. It started out well enough:

Mayor Michael Bloomberg has unleashed another flurry of jabs on Washington, ridiculing the federal government's rebate checks as being "like giving a drink to an alcoholic" on Thursday, and said the presidential candidates are looking for easy solutions to complex economic problems.

Recession watch: retail sales, new jobless claims rolling over

One of the things I wanted to try here is to post bits of significant economic data that would scroll off the page on the great orange satan in about 10 minutes. One of those items was yesterday's retail sales number. For about the last 6 months, most economic data has been deteriorating steadily, but two of the holdouts were retail sales and jobs data. A couple of weeks ago the December nonfarm payroll number finally went negative.

NonFarm Payroll

Indian Fish in American Waters

This is the name of a low-budget movie which is billed as a romantic comedy. I did not find it either romantic or funny.

The "romance" occurs between Naveen who comes to the NY-NJ area on an H-1B visa and an Indian-American woman who is the friend of Bobby, the guy who owns the body shop that is his "employer". The drama, romance and comedy - such as they are - result from the cultural divide between the FOB (fresh of the boat) and ABCD (American-Born Confused/Compassionate Desi).

I urge everyone to watch it (it is available on Netflix), if only to see the business practices of body shops that bring hordes of H-1B visa holders to these shores. On the very first day, Bobby tells Naveen the rules:

Pages