Wednesday, February 18, 2009

Of Interest from The New Yorker

There have been some great money-related articles in The New Yorker lately.

The Feb. 2 issue was jam-packed:

Alex Ross on affordable concertgoing in New York: Cheap Seats

John Lanchester reviews the book Lords of Finance, in Heroes and Zeroes: When central bankers rescued, then ruined, the world.

The Rationalist, Laura Secor's profile of an Iranian free-market economist. I found the cause-and-effect analysis of various policies fascinating, how politics can lead to such wild swings in a country's economy.

And in the Feb. 9 16 issue, The Ponzi State. George Packer's article on Florida's real estate boom and bust is a must-read. The most poignant part for me was about a man named Dan Hartzell, who described himself as "a blue-collar type guy." He was recently laid off and has been desperately looking for work ever since, with no luck.

The Hartzells didn't take out a subprime mortgage. They hadn't lived beyond their means. After Dan lost his job, they stopped renting DVDs and buying toys.... They felt lucky to have avoided eviction, but now they were facing the real possibility of homelessness....
Dan knew that his plight was the result of rising unemployment in a bad economy that was shedding the few remaining manufacturing jobs... and yet, in pondering the causes of his trouble, Dan couldn't avoid the feeling that the world had singled him out for some terrible payback, that it must have been his fault, that the failure was his alone and he had no right to anyone else's help. It occurred to me that this was an attitude that no senior figure on Wall Street had adopted.

And this guy gets at what I always think about when I hear people saying that it's okay for us to send manufacturing jobs overseas because we're becoming a service economy or whatever-- as if it's all going to be okay because everyone will just be re-trained to work in retail or do something with a computer. But the reality is that we need blue-collar jobs, not just white-collar jobs. Some people are better suited to that kind of work, some people want to do that kind of work, and there shouldn't be any judgment placed on it, as if it's only good enough for those other people in some third world country. Dan Hartzell isn't ashamed of not being "the behind-the-counter-take-your-money-can-I-help-you-find-your-dress-size type." So why can't this country find a way to employ more people like that with dignity, with a decent wage, and without looking for them to take the first pay or benefit cuts when things go wrong?

Anyway, lots of good reading in these articles... you have to be a registered user to get the full text of a couple of them, but enjoy!


Chad @ Sentient Money said...

It is foolish to care if blue, service, or white collar jobs are sent overseas. It's not the type of job that goes overseas that matters, as much as the quality of the job. Just because someone makes $60k a year putting 4 bolts on a Buick doesn't mean that is a quality job. It's not a quality job, because the value of that work is not $60k, as almost anyone can do it. However, an electrician or machinist making $80k a year is probably fairly paid or maybe even a little underpaid, as the value they provide is much higher and takes real skill.

It is not possible to protect low quality jobs without sacrificing other portions of our economy, as there are literally billions of people standing in line for the bolt job at Buick, as it is easy. If we protected all of those jobs we would be paying double, triple or more for everything from TVs to cars.

Globalization will destroy these jobs until everyone is living like we live. Once that happens the low quality jobs will be more valuable, as there will be billions of jobs for the billions standing in line. Basically, go back about 100 years and see how the U.S. labor market functioned until the mid-80's. That is what the world is going through now, which hurts all the countries that have already gone through it.

Of course there are other issues like availability of natural resources that will impact this, but then it gets complicated.

Jill Kemerer said...

The jobs that have gone overseas have gone to the cheapest bidder. What will happen when the living conditions improve in those countries and the people demand more from their government? Their cost of living will rise.

Companies are already skipping from country to country, trying to find the cheapest labor. It doesn't stay competitive for long (and if it does, say due to communist regimes, at what human cost?).

The sad fact is that our country is facing a shift just like it did a hundred and fifty years ago. Then it shifted from agriculture/trade based to industrial based. Fear prevails among average people like myself, because it isn't apparent what we're shifting to.

I see both sides of the whole sending jobs overseas debate, but I don't know which side is right. All I can say for sure is that someone I know loses a job every week, and new jobs are hard to find.

Thanks for an interesting and informative blog. I always enjoy reading it.

Miss M said...

I've noticed a lot more money/finance related stories in the media as well. The morning show running tips on how to save money, the newspaper filled with stories about the latest crisis. It's an interesting shift.

As an earlier commenter hinted at, what is the cost of cheap goods? We are not paying the true price for these objects, when you look at the environmental damage that will eventually have to be cleaned up (at great cost), the toll on the people of these countries, these costs haven't been figured in yet. They'll be paid sometime in the future.

Rockon said...

I see both sides of the whole sending jobs overseas debate, but I don't know which side is right. All I can say for sure is that someone I know loses a job every week, and new jobs are hard to find.

mtvtruelife said...

True Life: I’m In A Family Feud
Are you currently in a major dispute with a family member? Is this feud causing a ruckus in your household, or making home life unbearable? Are other family members staying neutral or are sides being chosen? Has the dispute elevated to the point where some legal action has been taken or has become necessary? Are you considering seeking family counseling for this feud, or does this feud seem to have no end in sight?
OR, is your family currently fueding with another family, like a modern day Hatfields vs McCoys? Are you not allowed to talk to them, even though you might be friends with one of their members? If you feel like a family reunion is going to be virtually impossible to pull off this year or ever, MTV wants to hear from you.
If you appear to be between the ages of 17-28 and are embroiled in a family feud please email us at Be sure to include your name, your story, a phone number and a photo.