First They Came for Bigger Cubicles

Unemployment fell to the 3.4%, the lowest on record since the early days of the Richard Nixon administration. Jobs have never been easier to find and workers are able to get raises. The American economy, however, relies on cheap compliant labor, so economists are worried.

Two Bad Options, One Obvious Choice

Historically, unemployment tends to go up under Republicans and down under Democrats. Meanwhile, Democrats like Jimmy Carter and of course the current president have suffered from inflation. But what would you rather have? A paycheck shrinking from inflation? Or no paycheck at all?

Why Business Wants a Recession

           Give Jerome Powell credit for candor: the Fed chairman admits that his policy of increasing interest rates to fight inflation might push the economy into a recession. “No one knows whether this process will lead to a recession or, if so, how significant that recession would be,” he recently told reporters.

            If it does, one sector won’t be entirely displeased: employers.

            According to the Deloitte accounting firm, a typical Fortune 500 company spends $1 to $2 billion a year on payroll, averaging between 50% and 60% of total spending. Controlling labor costs, unsurprisingly, is a top priority for employers.

            In the boom-bust cycle of labor-management negotiations, the post-pandemic Great Resignation has triggered a labor shortage, a phenomenon we rarely witness and tends to fizzle out fast. Workers are quitting and retiring early, tanking the labor force participation rate. Those who remain enjoy the upper hand at interviews that feel like the job prospect is sizing up the company rather than the other way around. Labor shortages are driving up salaries, shortening hours, prompting signing bonuses and forcing bosses to accommodate people who prefer to work at home. Just 8% of office workers in Manhattan are back in the office a full five days a week.

            The most recent data published, for June, finds that wages and salaries soared 16.8% on an annualized basis as benefit costs went up 14.4%.

            Workers, angry and resentful after decades of frozen real wages and merciless downsizing, are becoming demanding. This reversal of a power dynamic in which workers were supplicants and bosses called the shots has also strengthened labor unions that had been losing membership for years.

            This, some CFOs may be thinking, calls for a recession.

            Company profit margins are at a 70-year record high, up 25% each of the last two years as the result of raising prices during the pandemic. Which means that, even allowing for an 8% inflation rate, a generic S&P 500 corporation should easily be able to ride out the average 26% earnings decline suffered in the most recent typical recessions that took place in 1990, 2000 and 2020. (A bigger crisis like the 2008-09 Great Recession, which reduced earnings by 57%, is another matter.)

            No corporate officer would voluntarily reduce earnings. Or would they, in order to get something more valuable: regaining leverage over labor?

            Traditional conservative allies of big business are openly arguing in favor of higher unemployment. “The recent drop in work and labor force participation—particularly among young workers—is troubling [my emphasis],” writes Sarah Greszler in a white paper for the Heritage Foundation, the right-wing think tank. “Job openings, at 11.3 million, remain near record highs, and record percentages of employers report unfilled positions and compensation increases.”

            Greszler summarizes: “Continued low levels of employment [sic] will reduce the rate of economic growth, reduce real incomes and output, result in greater dependence on government social programs, require higher levels of taxation, and exacerbate the U.S.’s already precarious fiscal situation.”

            Workers, of course, feel like they can finally breathe. High demand for labor means that they can quit positions where they feel unappreciated and/or undercompensated, pack up and move to another state and create a healthier balance between their family and work lives. The current situation is anything but “troubling.”

            Executives at employers like Apple, Tesla and Uber have had enough of workers calling the shots. They’re demanding that people get back to work — at the office — or find another job. “A quickly shifting employer-employee dynamic could give companies the ammunition to take a harder line against the full-time work-at-home arrangements that many employees have pushed for, according to corporate policies experts. In fact, they say more companies are likely to start pressing staffers to come back to the office — at least a few days a week,” reports CNBC. “The hybrid workforce is not going to go away, but the situation where employees refuse to come to the workplace at all is not likely to hold,” Johnny C. Taylor Jr. of the Society for Human Resource Management tells the network.

            Perhaps no one has told CEOs that at-home work empowers them too. Rather than hiring security goons to escort laid-off workers past their terrorized colleagues, companies can memory-hole the condemned by deactivating their remote-access passwords. Who’ll notice one less square on the Zoom screen?

I’m not subscribing to a dark Marxist suspicion that CEOs, the Fed and other powers-that-be are conspiring to slam the brakes on an economy that would otherwise be coming in for a soft landing as pent-up consumer demand from the pandemic naturally ebbs, in order to return their recently empowered employees to their rightful status as wage slaves. Powell and his fellow governors are doing what comes naturally to government, treating a disease based on a diagnosis that is close to a year out of date and, reasonably, including wage increases as part of their calculus of what constitutes a major driver of the inflation rate.

Business, however, does see what’s coming. If the captains of industry aren’t worried enough to be calling their pet politicians to demand an end to interest-rate hikes, one reason might be that they see a silver lining to the next recession.

(Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, co-hosts the left-vs-right DMZ America podcast with fellow cartoonist Scott Stantis. You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)

In Actual Russia, No Sign of Sanctions

             It’s time to get real. It’s been time to get real. Russia has won its war against Ukraine.

            This outcome comes as no surprise. Anyone with access to a map could see that the chances of Ukraine prevailing against Russia were slim to none.

            The only way Ukraine could have emerged victorious—which would, according to the Ukrainians themselves, mean pushing it out of Crimea and deposing the separatist pro-Russian republics of Donetsk and Luhansk—would have been if the United States and its Western allies had been willing to launch nuclear weapons, which would have led to global annihilation. Once the decision was made not to start World War III, Ukraine’s defeat became inevitable. This, everyone sane knows, is for the best.

            Determinative to this conclusion was an unusual pair of motivations. Normally, when a war is fought on one country’s territory, the invaded country fights harder than the invading forces. Paradoxically, despite suffering damaged infrastructure, the invaded state enjoys the homefield advantages of complete knowledge of the battlefield and much shorter supply lines. Aside from sporadic cross-border missile strikes, this war has been fought entirely on Ukrainian territory.

This conflict is different because Russia has to win; it cannot walk away. Ukraine has a 1,200-mile border with Russia, it wants to join an anti-Russia military alliance and its government was openly hostile to Russia before the war. And when Germany invaded the Soviet Union in 1941, its armies came through Ukraine, where the Nazis were greeted as liberators. Unlike America, which could bring its troops home after losing on the other side of the world in Afghanistan and Iraq and shrug off its imperialist misadventures and could leave Vietnam after pretending that more political will on the home front would have resulted in victory, Russia sees its military operation as existential. Ukraine isn’t a misbegotten side project. It’s as essential in the same way the United States would respond to a Canada that turned hostile to the U.S.

            Unfortunately and dangerously, American media consumers are being pounded with an endless deluge of propaganda promoting the ludicrous idea that Ukraine is winning and/or will ultimately prevail militarily. This fantastical assertion props up political support for shipping $60 billion worth of weapons to Ukraine, with more on the way—never mind the 70% that Zelensky’s wildly corrupt government sells on the black market and the Javelin missile systems that wind up for sale on the dark web. (Christmas is coming! Don’t forget your favorite political cartoonist and columnist.) By way of comparison, the U.S. Department of Health and Human Services estimates that we could abolish homelessness here for $20 billion.

            We’re also being told that Russia is crumbling under the crushing blow of vicious Western sanctions deployed as part of the White House’s openly-stated war aim that it wants “to see Russia weakened.” The Russian economy, it is said, is collapsing. Russian elites, they say, will soon overthrow President Vladimir Putin.

            Let me tell you firsthand: there is zero sign of economic distress in Russia.

            I’ve spent the last two weeks in Moscow and Saint Petersburg, Russia’s two biggest cities. Stores are bustling, people are spending, unemployment is low and still falling, there are lines at ATMs and whatever else is happening, the economy is anything but bad. The Galeria Mall across the busy street from my hotel in Saint Petersburg has a few closed stores shut down by Western chains but the majority remain and consumers are shopping like mad. European and American tourists are few and far between, but it’s exactly the same here in sanctions-free Istanbul where I’m writing this. Westerners stopped coming at the start of the COVID-19 lockdown two years ago and still haven’t returned. If Russians are unhappy with Putin—and they’re not—it’s not because of the economy.

I know from bad economies; where I live in New York, crime is out of control, homeless people go untreated for an array of mental illnesses and some are killing people, and being killed, and many storefronts have been empty and boarded up since the beginning of the pandemic. Any New Yorker would or should happily trade places with their Muscovite counterpart, who lives in a city with clean streets and subways that don’t serve as rolling homeless shelters and where life feels as if COVID-19 was never a thing. News stories that claim Russia is on the ropes are a giant magnificent pile of lies so over-the-top that I can’t help but be impressed by their glorious audacity and easily-debunked mendacity. All you have to do is go to Russia, as I did, and see for yourself that it’s all bull—but hey, that’s a lot of trouble—because of sanctions that seem to be hurting us more than them.

            Self-delusion is more fun. Who, after all, should you trust? The same U.S. state media that told you Saddam had WMDs? Or some cartoonist-columnist who told you, well in advance, that the U.S. didn’t stand a chance in Afghanistan, Trump would win in 2016 and that he would attempt a coup d’état to remain in power?

(Ted Rall (Twitter: @tedrall), the political cartoonist, columnist and graphic novelist, co-hosts the left-vs-right DMZ America podcast with fellow cartoonist Scott Stantis. You can support Ted’s hard-hitting political cartoons and columns and see his work first by sponsoring his work on Patreon.)

Rights, Camera, Inaction

The Supreme Court overturning of the abortion rights decision Roe v. Wade has many activists wondering how abortion and other rights that are being taken away can be restored. The answer is through hard, prolonged, difficult, self-sacrificing work that most people on what passes for the American Left are unwilling to undertake.

Support People by Killing Other People

American politicians and television viewers have been deeply moved by images of the suffering people of Ukraine. Unfortunately, the main response has been to impose brutal sanctions on Russia that will destroy the Russian people but not their leaders, who are well insulated from the effect of sanctions. If humanitarianism is the point here, what about the people, the human beings, of Russia?

The Annals of Woke Progress

For identity politics “woke” liberals, symbolic gains in diversity are all that really matter when gauging progress. Rather than focusing on policies that actually improve people’s lives, they promote privileged subsets of historically underprivileged groups. The absurdity and futility of this approach manifests itself when token representatives like Kamala Harris and Hillary Clinton join the ruling classes and become just as oppressive as the traditional old white males.

Democratic Messaging on the Economy

It must be frustrating for President Biden to try to convince Americans that they are doing better than they feel they are doing. After all, the stock market is doing well, there is strong job growth and it’s easy to get a raise. But people are really obsessed about inflation and nothing Democrats say is going to change their minds.

css.php