Bill Knight
column for Dec. 17, 18 or 19, 2018
Days after print publication, Bill Knight’s syndicated newspaper column, which moves twice a week, will appear here. The most recent will appear at the top. (Columns before Sep. 11, 2017, are archived at http://billknightcolumn.blogspot.com/).
Wednesday, December 19, 2018
Saturday, December 15, 2018
From Christ to Scrooge, we can learn – and change
Bill Knight
column for Dec. 13, 14 or 15
Advent
is a time of preparation, for celebrating Christ’s arrival at Bethlehem and for
his eventual return. Christmastime also is when we again appreciate Christ’s
devotion to everyday people, recorded in passages like the Gospel’s Luke recounting
Christ reading Scripture: “The Spirit of the Lord is upon me,” he said, “because
he has anointed me to bring good news to the poor.”
Between
Christ’s love of the needy on the one hand, and Ebenezer Scrooge’s overnight
realization that compassion means more than money on the other, Christmas can
cause us to reflect and re-prioritize our values.
One
reflection concludes that the U.S. “market economy” is broken. That’s despite once-progressive
economic and social values, which were discarded like once-bright Christmas
trees dragged to the curb in dismal January.
Ten
weeks of a gloomy Wall Street performance is one reason to reassess strategies
that aren’t functioning for most Americans. Two other reasons are history and
the future.
First,
there’s that apparent stock market “correction” the economy is enduring. The
Wall Street Journal described the New York Stock Exchange’s Dec. 7 finish as
“another rout,” putting it “into the red for the year,” adding that the first
week of the month was “the worst start to a December since 2008.”
Last
month, the Dow fell 223.08 points (.008%), the S&P declined 26.02 (.009%),
and NASDAQ went down 32.82 (.004%). Relatively modest losses, November’s slide
followed the stock exchange’s substantial drop in October, when the WSJ
commented that it was “the worst October for the S&P since 2008.”
Next,
some history helps illuminate how the economy has deteriorated for most
Americans in the last 40-plus years. An article in Fortune magazine’s October
1944 issue – “The Economics of a Free Society: A Declaration of American
Economic Policy,” by corporate executive William B. Benton – outlined a plan
for post-war America. A founder of the Benton & Bowles ad agency, Benton
represented a corporate lobby when he suggested an economic route for the road
ahead. His call for recovery and prosperity focused on having strong unions and
rising wages, maintaining government regulations on business, and avoiding the
creation of profit at the expense of communities.
His
vision was largely enacted and functioned for most of the 1950s and ’60s, when
business leaders at least acted like they cared about their communities and
labor relations. That started to change in the ’70s.
Corporations’
sense of overall responsibility; duties to employees, customers, suppliers and
communities; obligations to a “greater good” beyond financial performances; and
a notion of shame all seemed to get discarded like toys or tools once treasured
but later deemed obsolete. Since, even when economic growth has been OK (as
it’s been since 2008), most gains went to the wealthy. Median weekly earnings
since 1979 improved 0.1 percent; families’ net worths are lower than decades
ago and, as recently reported, even Americans’ life expectancy is falling.
Reasonable
responses are to restore higher taxes on the rich, and to return controls on
corporations.
That
leads to the third reason for the season’s reflection on the situation and our
actions: the Accountable Capitalism Act, introduced in August by U.S. Sen.
Elizabeth Warren (D-Mass.). As I previously wrote, her bill takes a step toward
reviving the economic standing of working and middle-class families by changing
corporations from entities focusing on maximizing shareholder value to
enterprises operating to benefit all corporate stakeholders – stockholders, workers,
vendors, customers and communities.
Warren’s
key reforms would move big corporations’ charters from states to the federal
level, where charters could be revoked; prohibit political expenditures by
corporations unless 75 percent of boards of directors and shareholders approve;
and require corporations to have 40 percent of their boards elected by
employees (like Germany, where company boards must include half owner
representatives and half worker representatives).
“There’s
a fundamental problem with our economy,” Warren said. “For decades, American
workers have helped create record corporate profits but have seen their wages
hardly budge. To fix this problem, we need to end the harmful corporate obsession
with maximizing shareholder returns at all costs, which has sucked trillions of
dollars away from workers and necessary long-term investments.”
The
nation needs an economy where business once more invests in workers and
communities.
This
Advent, it’s time to prepare to punish or praise businesses and business
leaders who are “naughty or nice,” and to organize to ensure the country learns
from the holiday and the reason for the season.
Thursday, December 13, 2018
Much business reporting misses regular Americans
Bill Knight
column for Dec. 10, 11 or 12, 2018
Accurately and consistently predicting corporate stocks – much less taking credit (or blame) for Wall Street – is like cutting diamonds in a bouncy house. But forgotten amid exclamations of a vibrant economy or sensational handwringing about volatility is news coverage that regular working people are suffering losses – in jobs – even as stock prices bounce back or tiny improvements in wages start a crawl back from the abyss of stagnation.
Sometimes, it seems that workers just can’t win for losing.
Shown in last week’s heavy losses – all three major U.S. stock exchanges closed deep in the red Dec. 4 – Wall Street seems to be heading toward a “correction.” That usually, ultimately falls on the shoulders of people who work for a living instead of those who amass fortunes by buying and selling shares of companies.
The worst downturn in seven years, last Tuesday finished with the Dow plunging 799.36 points (3.1 percent); Nasdaq dropping 283.09 (3.8 percent); and the S&P falling 3.2 percent, a slide that could eventually mean hiring freezes, layoffs or bankruptcies.
Yes, things would be getting better if they weren't going so badly.
For example, a snapshot of U.S. county employment and wages from April-June, released last month by the U.S. Bureau of Labor Statistics, seems to show that wage improvements in a handful of geographic areas, such as McLean County, may have actually contributed to increases in joblessness.
McLean overall showed wages rising 9 percent then, when its employment fell 2 percent.
Statewide, the percentage change in wages from the 2nd quarter of 2017 to this year was 3.4 percent, while employment mostly held steady, growing a meager 0.8 percent over the same period.
Meanwhile, the most recent national unemployment rate was marginally unchanged, at 3.7 percent, BLS said. However, joblessness actually increased slightly, according to Economic Policy Institute analyst Heidi Shierholz, who said, “The unemployment rate rose 0.06 percentage points in October, from 3.68 percent to 3.74 percent.”
The nation had 6.08 million jobless – 111,000 more than the month before, BLS reported.
Illinois in October saw an increase in unemployment to 4.8 percent, up from 4.5 percent a year ago, according to the state Department of Employment Security, which estimated an additional 8,700 jobless people.
The only exceptions to worsening employment in Illinois were the Chicago area and Danville, both of which had slight gains in employment.
In October in McLean County – where the number of nonfarm jobs was unchanged, at 95,000 – the jobless rate went downhill, from 3.5 percent to 4.1 percent.
Likewise, other metro areas in the state saw higher unemployment:
Peoria weakened 0.3 percent, to 4.8 percent; the Quad Cities worsened 0.1 percent, to 3.9 percent; and Springfield deteriorated 0.3 percent, to 4.1 percent.
As far as major corporations and companies of special interest to Illinois, Tuesday’s nose-dive saw these precipitous declines: Amazon -103.6, Google -53.89 and Netflix -14.97, with Boeing -17.46, Caterpillar -9.63 and John Deere -10.62. Thursday was tumultuous, too, with Amazon, Google, Netflix and John Deere all recovering slightly, but Boeing and Caterpillar sliding further, -10.60 and -0.97 respectively.
As forecasts get wild and looser, the labor market is getting tighter, helping to get employers to raise pay. However, whether it’s cutbacks, consolidations or closings, the number of available jobs make it tougher on everyday Americans.
Like financial analysts trying to be precise (or at least comforting) for investors, business journalists trying to be complete, fair and accurate can be daunting, like doing electrical work in an earthquake.
But: Where is the news about the Rest of Us.
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