Category: employment

God Bless the Swiss People*

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The Swiss voters just overwhelmingly approved a referendum for executive compensation reform, including binding shareholder votes on executive pay, bans on golden parachutes, and merger bonuses:

Swiss voters have approved measures to curb executives’ pay and outlawed golden parachutes that can result on directors pocketing multimillion-pound payoffs.

Exit polls suggested almost 68% of those who turned out for Sunday’s referendum, and all of Switzerland’s 26 cantons, were in favour of the measures, which also include giving shareholders a binding vote on executive pay, banning golden hellos and banning bonuses that encourage buying or selling firms. Boards of directors that fail to comply face jail terms.

………

Minder says the massive sums demonstrate that company boards have lost control of pay and prefer to fork out “astronomical” salaries rather than pay dividends to shareholders.

Minder told the Swiss daily Le Temps that the only solution was to give shareholders the power to set pay. If his law is passed all compensation packages to board members and company heads would need their approval.

According to the proposed law, executives of listed companies who failed to abide by the new rules could face up to three years in jail and fines amounting to up to six years’ salary.

Needless to say, the elites are freaking out over this:

The Swiss government and the upper house of parliament opposed the initiative, warning it could provoke an exodus of big companies.

Minder rejected this, saying that the level of disquiet over executive pay and bonuses in other countries meant his initiative could become Switzerland’s “best export product”.

“It’s a great advantage for investors,” he said, suggesting that instead of chasing companies away, such a law would entice investors to set up firms in Switzerland.

I’m inclined to agree that this will make businesses more competitive, not less competitive.

The amount of capital that has been wasted on paying people about whom little is exceptional but their own sense of self-worth is staggering.

If the Swiss vote triggers a race to the bottom in executive compensation, the rest of us will benefit.

*I cannot f%$#ing believe that I f%$#ing said that.

How Many Jobs Does the Keystone Pipeline Create?

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Only 20.

Call me a political Little Orphan Annie, but I think that if you have to lie this much, it’s probably not a good idea:

TransCanada Corp. (TRP)’s Keystone XL oil pipeline, heralded by supporters as a major job creator, will add few permanent positions once the $7 billion project is built.

The number of people needed to operate and maintain the 1,661-mile (2,673-kilometer) pipeline may be as few as 20, according to the U.S. State Department, or as many as a few hundred, according to TransCanada.

“I don’t see a big jobs impact,” Stephen Fuller, director of the Center for Regional Analysis at George Mason University in Arlington, Virginia, said in an interview. “It gets the oil into refineries that already exist. It’s like replacing a bridge on the highway.”

The debate in Washington has focused on short-term construction and manufacturing jobs, rather than on permanent ones. Estimates for construction and manufacturing employment range from 2,500 to 20,000, depending on assumptions of how much of the project’s budget will be spent in the U.S. The company says some of the steel will be made in Canada and India.

TransCanada Vice President Robert Jones said permanent jobs would be “in the hundreds, certainly not in the thousands,” in a Nov. 11 interview on CNN.

Calgary-based TransCanada says construction will create 20,000 “new, real U.S. jobs.”

What a surprise, TransCanada is a bunch of lying sacks of sh%$.

And the bitumen that they will be extracting is an ecological disaster as well.

It’s Jobless Thursday!!!!

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Not good news. Initial unemployment claims rose by 20K to 362K, as did the 4-week moving average and continuing claims, though extended claims fell, probably because of exhaustion of benefits.

Of more concern is that the Fed’s Open Market Committee minutes came out, and it looks like they are losing their nerve on quantitative easing:

The Federal Reserve signaled it may consider slowing the pace of asset purchases as officials extended a debate over whether record monetary easing risks unleashing inflation or fueling asset-price bubbles.

Several participants at the Federal Open Market Committee’s Jan. 29-30 meeting “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved,” according to the minutes of the gathering released yesterday.

This is not the right time for the Fed to take its head off the accelerator pedal.

No, I Did Not Watch the State of the Union

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I just don’t like listening to him, so I read the official transcript.

Rather unsurprisingly, he wants to throw mama from the train put forward “entitlement reform”, and he is patting himself on the back about the successes Obamacare (time will tell, but I doubt it), and killing bin Laden.

He also waxes eloquent over lowering the deficit, because austerity has worked so well where it has been tried. (Not)

He also proposed infrastructure repair, but that’s not going to go anywhere.

I think that the most substantive proposal he made was to raise the minimum wage to $9.00/hour in stages through 2015.

As compared to his promise from the 2008 campaign, raising the minimum wage to $9.50 by 2011, this barely keeps up with inflation.

At least he is proposing an automatic inflation adjustment.

The real problem is that the minimum wage has plummeted relative to median and mean wages over the past 40 years

Source of data.

Based on this chart, it would appear that the minimum wage needs to increase by about 20% immediately to hit the trend (mid to upper 40% range), but the reality is that boosting the minimum wage has a big effect on boosting the lower half of the wage scale, so it probably needs to go up by about 40% to return to trend in the longer term.

Note also how the lines for median (50th percentile) and mean (average) have diverged.  This is an artifact of the increasingly inequality in our society.

I call this the “Bill Gates walked into the room, so we are now all millionaires” effect.  It makes the mean and the median diverge.

Setting the minimum wage to slowly, and automatically, converge to 45% of the minimum wage over the next half decade or so would serve to do a lot to reverse the income inequality .

Least Surprising Study Discovery Ever

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I’m shocked, shocked to find that gambling is going on here!

The Project on Government Oversight (POGO) has completed a study that shows that the revolving door at the SEC may have short circuited effective regulation:

Former U.S. Securities and Exchange Commission staffers who now work in the private sector may have helped derail last year’s effort to reform the $2.6 trillion money market fund industry, according to a report released on Monday.

The case study on money market fund lobbying is part of a 60-page report by the Project on Government Oversight (POGO). It is one example within a broader review by the non-profit government watchdog that examines in detail how the “revolving door” at the SEC may have impacted policy and enforcement decisions over a 10-year period.

The publication of the report comes a few weeks after President Barack Obama nominated Mary Jo White, a former prosecutor and high-profile white collar defense lawyer, to lead the SEC.

While White’s nomination has generated little controversy so far, some have questioned whether her past defense of Wall Street executives could impact how she does on the job.

“The revolving door is deeply embedded at the SEC and throughout the federal government,” the report said.

“The close linkage between the regulators and the regulated can influence the culture, the values and the mindset of the agency – not to mention its regulatory and enforcement policies.”

Well, duh.

But this is not an unfortunate linkage, it is bribery.  If you are a regulator, you know for a fact that when you leave public service, if you have played nicely with the finance industry, and haven’t murdered a prostitute, that you will get a job that would make you set for life in just a couple of years.

I’m not sure how to put an end to this, but a way needs to be found to stop this.

Play Him Off, Keyboard Cat!

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For the first time since 1415, the Pope Benedict has announced that he will be abdicating:

Citing failing strength of “mind and body,” Pope Benedict XVI stunned his closest aides and more than 1 billion Catholics by resigning on Monday, becoming the first pope to do so in nearly 600 years and ending the tenure of a formidable theologian who preached a gospel of conservative faith to a fast-changing world.

Keeping with his reputation as a traditionalist, Pope Benedict delivered his resignation — effective Feb. 28 — in Latin, to a private church body in Vatican City. “I have had to recognize my incapacity to adequately fulfill the ministry entrusted to me,” he said. “For this reason, and well aware of the seriousness of this act, with full freedom I declare that I renounce the ministry of bishop of Rome, successor of Saint Peter.”

The decision by the 85-year-old German pontiff sets up a pivotal leadership contest in the marbled halls of the Vatican that is coming sooner than observers expected. Although questions about the pope’s health have long swirled — he was occasionally filmed nodding off during mass — he seemed committed to continuing a papacy that has divided Catholics and non-Catholics alike.

The question is whether it’s about his health, or whether, as as Digby suggests, that revelations from the case of former Archbishop of Los Angeles, Cardinal Roger Mahony, where Cardinal Joseph Ratzinger, then leader of the Congregation for the Doctrine of the Faith (it used to be called the Inquisition) was directing the (non) response to the church’s sexual abuse scandal.

I’ll look forward to seeing Jon Stewart’s take on all this.

Meh

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The labor force grew by 157000 jobs in January:

American employers added 157,000 jobs in January compared with a revised 196,000 jobs the previous month, the Labor Department reported on Friday. The unemployment rate was little changed at 7.9 percent, about where it has been stuck since September.

On the bright side, revised government data showed that the economy added 335,000 more jobs than originally estimated during all of 2012, including an additional 150,000 in the last quarter of the year. That was on top of the previously reported fourth-quarter job growth of 603,000 and 2012 growth of 2.2 million.

The higher revisions, in particular, encouraged traders on Wall Street, sending the Dow Jones industrial average over the 14,000-point mark for the first time since 2007.

Still, job growth has been modest compared with previous recoveries, and economists saw little in January’s report to suggest that hiring would pick up soon.

Look at the graph.

The current rate has jobs remaining below trend for over a decade, the best realistic case we see is still a lost decade.

Like I said, “Meh”.

These employment numbers Kung Fu is weak.

Hurrray for the ……………… Swiss?

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Switzerland citizens have petitioned binding shareholder votes on executive compensation to referendum:

In February 2008, Thomas Minder, a Swiss businessman whose family-owned company is best known for its old-fashioned herbal toothpaste, attacked his banker, UBS Chairman Marcel Ospel, as if he were a form of stubborn plaque. At a shareholders’ meeting in Basel, he stormed the podium as Ospel addressed the crowd. Ospel’s bodyguards grappled with Minder and wrestled him away before he could land his symbolic blow — he was trying to hand the embattled head of Switzerland’s largest bank a bound copy of Swiss company law, which codifies corporate temperance.

 “Gentlemen, you are responsible for the biggest write-downs in Swiss corporate history,” Minder had railed just a few minutes before, referring to UBS’s loss of $50 billion during the subprime meltdown that prompted it to seek a government bailout. “Put an end to the Americanization of UBS corporate philosophy!”

 The bodyguards marched Minder out of the hall amid a chorus of boos and jeers. Two months later, Ospel was gone, taking the fall for UBS’s recklessness, but Minder’s campaign against big bonuses had only just begun; shortly after Ospel was ousted, Minder filed the 100,000 signatures needed to launch a referendum to impose some of the tightest controls on executive compensation in the world.

 Of the top 100 Swiss companies, 49 give shareholders a consulting vote on the pay of executives. A few other countries, including the United States and Germany, have introduced advisory “say on pay” votes in response to the anger over inequality and corporate excess that drove the Occupy Wall Street movement. Britain is also planning to implement rules in late 2013 that will give shareholders a binding vote on pay and “exit payments” at least every three years. Minder’s initiative goes further, forcing all listed companies to have binding votes on compensation for company managers and directors, and ban golden handshakes and parachutes. It would also ban bonus payments to managers if their companies are taken over, and impose severe penalties — including possible jail sentences and fines — for breaches of these new rules.

Honestly, I was hoping that someone would do this, but in my wildest dream, I would have not have thought that it was the Swiss who would be at the forefront of this movement.

It appears that I have some stereotypical views about the Swiss, basically as conventional banker types, which does not reflect the actual reality.  I’ve got to be more enlightened.

Things to do in Boise When You’re Dead*

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OK,there is no actual dying involved, but I will be in Boise, Idaho for about 30 hours on business (Sunday night through about Noon on Tuesday) next week.

It’s a work thing, but I figure that I’ll have Monday evening off.

Any suggestions of things to do?  I’ve been told that there are some good Basque restaurants in the area, though I haven’t got any specific names.

*Truth be told, I’ve never seen the movie Things to do in Denver When You’re Dead, but the title has stuck in my head.

Good Riddance

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Lanny Breuer, head of the criminal division at the Department of Justice and pimp for the banksters, has resigned:

Lanny Breuer is out as head of the Criminal Division of the Department of Justice, according to the Washington Post. After his ratlike performance on Frontline (transcript here) it won’t be long before we find him at some creepy New York or DC law firm defending his best friends, the banks and their sleazy employees. His legacy is simple: too big to fail banks can’t possibly commit crimes, so minor civil fines and false promises of reform are punishment enough. Jamie Dimon couldn’t have put it better.

BTW, the Department of Justice has said that they would never work with the producer of the segment ever again:

He’s gone, but I’m certain that he’s going to a cushy Wall Street gig where he will make millions of dollars.

It’s how back loaded bribery works.

No Accountability for the Right Wing

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Karl Rove just got a 4 year contract extension from Fox News, despite his meltdown on election night 2012:

Politico reports that Fox News has extended Karl Rove’s contract through 2016. If the past is any indication, you can expect the network to continue to be used as a fundraising and publicity vehicle for Rove-affiliated outside groups, Republican Party propaganda masked as news analysis, and repeated failure to disclose Rove’sentangled interests.

Rove, the so-called “architect” of President Bush’s election wins, was hired as a Fox contributor in 2008.

During his appearances, Fox has frequently failed to inform its viewers that Rove is still an active participant in Republican Party politics — specifically the creation and operation of American Crossroads and Crossroads GPS, his PAC and non-profit, respectively, that spent millions opposing Democrats in the 2010 and 2012 elections.

He called everything wrong, he pissed away millions of dollars given him by right-wing rich chumps, and he ……… gets his paid gig at Fox extended by 4 years.

I wish that I had a job where I could f%$# up this badly, and still get my lucrative contract renewed.

Say what you will about the VWRC (Vast Right Wing Conspiracy), but their pay and benefits are pretty damn good.

Another ½%!!!! Woot!!!!

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The Federal Reserve has made a major change in its targeting, raising its inflation target tfrom 2% to 2½% and stating that they will continue quantitative easing until unemployment drops below 6½%.

This is a very big deal for two reasons, first, it’s the first time that the Fed has ever linked its rates to employment levels, and second, it’s a marked departure from their previous statements which said stuff like, “ZIRP for the nest 6 months, and then we reevaluate”.

What they are doing now is much clearer, and makes it much easier to determine near term behavior.

I’m not a big fan of the “confidence fairy” theory of economics, particularly when used to justify “expansionary austerity”, but the opacity of the Fed has not served the economy; all it has done is to reinforce the “high priesthood” aspects of the Federal Reserve’s reputation.

Fed statement after the break:

Press Release

Federal Reserve Press Release

Release Date: December 12, 2012

For immediate release

Information received since the Federal Open Market Committee met in October suggests that economic activity and employment have continued to expand at a moderate pace in recent months, apart from weather-related disruptions. Although the unemployment rate has declined somewhat since the summer, it remains elevated. Household spending has continued to advance, and the housing sector has shown further signs of improvement, but growth in business fixed investment has slowed. Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

 Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

 To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and, in January, will resume rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

 The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

 To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. The Committee views these thresholds as consistent with its earlier date-based guidance. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

 Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed the asset purchase program and the characterization of the conditions under which an exceptionally low range for the federal funds rate will be appropriate.

Well, That Didn’t Take Long………

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2 weeks ago, a staffer at the Republican Study Committee published a study calling for common sense reductions in copyright regulation.

It was retracted in less than a day.

Now the author of this paper has been fired:

The Republican Study Committee, a [right wing even by the standards of Congressional Republicans(!)] caucus of Republicans in the House of Representatives, has told staffer Derek Khanna that he will be out of a job when Congress re-convenes in January. The incoming chairman of the RSC, Steve Scalise (R-LA) was approached by several Republican members of Congress who were upset about a memo Khanna wrote advocating reform of copyright law. They asked that Khanna not be retained, and Scalise agreed to their request.

The release and subsequent retraction of Khanna’s memo has made waves in tech policy circles. The document argues that the copyright regime has become too favorable to the interests of copyright holders and does not adequately serve the public interest. It advocates several key reforms, including reducing copyright terms and limiting the draconian “statutory damages” that can reach as high as $150,000 per infringing work.

The interesting thing is that it is likely that the real effect of the briefly released memo may be that it moved the Overton Window, because the proposals appear to have gone from unthinkable to merely radical, which is a very significant move.