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The Purple Muse

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Welcome to the web site of The Purple Muse.  We offer commentary and opinion on the major issues being debated in our world today.

Monday, August 25, 2014

Redevelop and Recycle Major US Cities

My wife and I traveled to Oklahoma and Missouri a couple of weeks ago.  We arrived in the St. Louis area the day after the Ferguson, Missouri ( an urban suburb of St. Louis) riots began following the shooting of a young black man by a white police officer.  During our two days of visiting the city of St. Louis we had an opportunity to drive around some of the less desirable residential neighborhoods of the city and see some of the abandoned industrial areas.  The city of St. Louis has a population of about 300,000 compared to its peak population of 856,000 in 1950.  Like Detroit and many other US cities the maximum population and operating industrial capacity peaked in the early 1950s.  Since the post World War II period many changes have occurred in the economies of US cities.  Much of the abandoned property looks as if it has been existing in a war zone.  The reduction of property values in all cities impacted by the reduced population and industrial activity has created large areas of poverty with no hope for revitalization.

The time has come for all Americans to make a major investment in the redevelopment of abandoned urban land and recycling of building materials that are salvageable.  Small scale programs of this type have been initiated in Detroit and Cleveland.  It is time for the US government to launch a major program that cleans up a significant percentage of the abandoned property over the next 10 years.  I don't know how much it would cost but an investment of $100B over the next 5 years would be a good start.  I see the federal government issuing grants to US cities and counties to execute specific proposals to clean-up blighted areas.  The contractors hired to do the work must commit to hiring workers from the impacted areas so that skills can be learned and money injected into the local economies.  Once the land has been cleared the land must be returned  to natural state with trees, grasses or other natural covering.  After clearing the land the ownership would remain with the city or country administering the program.  It would be hoped that at some time in the future the land could be returned to productive use.  All funds generated from the sale of recycled materials would remain with the city or country administering the program.  In the mean time the land would be green space within the urban area, not a blighted area.

I would prefer for this program to be funded through the transfer of budget dollars from entitlement programs.  However, if necessary, I would be willing to transfer spending from other budget areas to fund this program.  I would even be willing to include this program in a overall budget deal that is developed consistent with the Simpson-Bowles fiscal responsibility recommendations. 

We all need to help redevelop and recycle blighted portions of US cities where many of our parents and grandparents grew up and the businesses that helped make the US a great country got started.  We can also help some of the people living in these areas do some productive work and gain some marketable skills.  We can also help our large urban areas improve their competitiveness in attracting new business and residents,  Recycling materials is also a good thing.

The time has come to redevelop and recycle major US cities.

TPM

5:58 pm          Comments

Sunday, August 3, 2014

Haunted Empire - Apple After Steve Jobs

Sometimes interesting books appear completely unexpectedly.  I recently received Haunted Empire - Apple After Steve Jobs by Yukari Iwatani Kane as a gift.  This book is essentially a sequel to Walter Isaacson's Steve Jobs with respect to the future direction of Apple Inc. and the lasting influence of Steve Jobs on the direction of the company.  I highly recommend this book to anyone that is interested in understanding how Apple has evolved over the past couple of years.  The manuscript was completed late last year so it is very current on all of the issues that Apple and its Chief Executive Officer, Tim Cook, have faced since the death of Steve Jobs.

It is clear the author believes that Apple is a company that has peaked in terms of its overall market influence and is now in a long term decline.  Apple has performed fairly well financially since Jobs death but the market (high tech, investors, users, media) continues to express concerns that Apple has not revealed its next blockbuster product area (wearable tech, Apple TV, or something else).  As I read the book I could almost hear Ms. Kane laughing at Apple's recent PR efforts to convince the market that their minor product upgrades are a big deal.  From the author's perspective Apple has passed its technology leadership position to other companies like Samsung and Google.

The book includes interesting discussions of many of Apples big issues that they have had to address over the past few years such as:  labor issues at its supplier factories in China; intellectual property battle with Samsung in courts all over the world; its international corporate structure designed to minimize US taxes and its legal problems related to its e-book business plan. Apple in one of the largest, if not the largest, publicly traded company in the world in terms of market capitalization.  It is no longer the small technology company trying to beat the big guys.  It is the biggest of the big guys.

We will see if the author is correct in her assessment.  Will Apple develop a sensational  new product line?  Can Apple keep growing the company and maintain its profit margins?  Will Apple's major legal issues finally get resolved?  Stay tuned.  I am sure there will be many more books about the legacy of Steve Jobs and the history of Apple in the years to come.

TPM

9:48 pm          Comments

Thursday, July 31, 2014

The Value of Labor

I was reading an excerpt from Wonkblog in the Wednesday, July 30, Washington Post today.  Matt O'Brien, the author, was lamenting "for the middle and working classes, real wages have been stagnant for the past 30 years and housing equity has taken a nose dive.  At this rate, it won't be long until the American Dream isn't even a memory for the middle class."  O'Brien doesn't provide any causes for the outcome that he accurately described.

The fundamental underlying cause for the American loss of middle class income and wealth is the increased participation in the global economy of hundreds of millions of workers in China, India and other Asian nations during the same period.  The value of labor around the world has been reset by market forces greater than the power any individual government.  Once trade agreements were established and the World Trade organization was created the power of global competition for work and jobs was unleashed.  US workers protected status that had existed since World War II was removed.  US workers have been forced to compete against hundreds of millions of low wage workers that were never part of the global economy in earlier decades.  When large amounts of new capacity are added to any market the value of the product declines.  In this case the product is unskilled and semiskilled labor.  US labor has a lower market value today than it did 30 years ago because of a massive increase in global labor supply.  It is a market fact.  It should be no surprise. 

Politicians don't want to discuss the truth behind this issue.  They talk about redistribution of wealth and fairness.  They don't talk about the fact that the global trade rules were changed by actions by governments.  Market forces worked.  The governments didn't understand the impact of unleashing the forces of a truly global labor market.  Or maybe they did understand what would happen and didn't tell the people the truth when the rules were changed.  After all, hundreds of millions of people in other parts of the world have much improved living standards.  On a global basis the world is better off.  Some people won, some people lost. 

US unskilled and semiskilled labor were among the losers.  The only way to materially impact this problem is for US citizens to increase their competitiveness through education and training.  There is no other way.  Handing out free stuff by the government doesn't solve any problem over the long term.  US citizens must increase the value of their labor significantly if they want their labor to have a value that delivers a comfortable life.

TPM

11:38 pm          Comments

Friday, July 25, 2014

Real Impact of ACA

Many people have analyzed the Affordable Care Act (ACA) since it was signed into law in March of 2010.  The Democrats controlled both Houses of Congress after the 2008 elections.  President Obama thought he had a "mandate" for his agenda from the electorate.  Obama and the leadership of the House and Senate ignored the Republican minority and jammed the law through the Legislative Branch even though it was clear that much of the details of the implementation of ACA would be determined by regulators after it was signed into law.  It is not hard to appreciate how Republican lawmakers felt after being ignored by Obama, Pelosi and Reid on one of the most important and controversial pieces of legislation in decades.

There have been all kinds of issues surrounding the ACA since the law was passed.  The Supreme Court challenge, freedom of religion related lawsuits and implementation issues have grabbed the headlines.  The ACA has been subject to thousands of hours of cable TV news coverage and millions of published written words.

But the real impact of ACA hasn't received a lot of direct coverage.  After the Tea Party formed in 2010 and the Republicans reclaimed control of the House of Representatives in the November 2010 elections, the Obama "mandate" dissolved into nothingness.  Barrack Obama has accomplished nothing of significance since the ACA.  He is paying the price for his arrogance in jamming through the ACA without bipartisan support.  It appears the Republicans have a very good chance of taking control of the Senate in the November 2014 elections with a very slim majority.  If this happens we should expect the Republican agenda being passed through Congress at warp speed forcing Obama to sign the bills or veto them, putting himself in a position of denying the will of the people's elected representatives.  If we think we are having fun in Washington DC today, it will get really fun if the Republicans win the Senate in November.

The real impact of the ACA has been complete gridlock in the US government, created by Obama and his Democrat colleagues. The damage builds every day that passes with no progress on other key issues.  Whatever good Obama thought he accomplished with ACA he has offset with the damage he created in his relationship with Republicans.  Hopefully, historians will examine this period and acknowledge the problems Obama created and how his administration was a net failure.

The next two years could be really fun, not.

TPM

10:01 am          Comments

Friday, July 11, 2014

Obama's Executive Failures

Barrack Obama is in the second half of his sixth year as President of the United States.  Many of us pointed out years ago that he was not qualified to be President because he had no track record of demonstrated executive skills at any time in his professional career.  Over the years there have been many circumstances which demonstrated Obama's executive leadership failures.  However, none has been as visible and undeniable as the massive numbers of illegal immigrants crossing over the Texas border.  In addition to the blatant illegality of the people crossing over the border a humanitarian crisis has been created by the numbers of minors crossing without adult family members present.  Obama assured us months ago that the border situation was under control.  He either was misinformed or purposely mislead the American people.  No matter which is true, it is clear Obama failed to act to protect our nation from the invasion of illegal aliens and allowed a humanitarian crisis to be created.

Obama is now being criticized by well known people in his own party for his failure to observe the situation first hand by visiting the Texas border while he is attending fund raising events in Texas, just a few hundred miles away.  The criticism is well deserved.  He criticized George Bush for flying over the damage caused by Hurricane Katrina and failing to immediately go to the gulf.  The illegal immigration issue is equally as important and Obama is now the one failing to go to the scene of the action.

Obama was ranked as the worst US president since World War II in a recent poll.  No kidding!  We are stuck with Obama for another two and one-half years.  However, we have the opportunity to remove the Democrats from controlling the Senate in November.  If the Republicans can gain control of the Senate and retain a majority in the House of Representatives the stage will be set for the Legislative Branch to put extreme pressure on Obama to change direction on many critical issues during the last two years of his term.  Obama may veto many bills in these circumstances.  If he does so he will take personal responsibility for his actions.

It is time for the United States to elect a President with demonstrated executive leadership skills.  We have over two years to find the right person and elect them.  We can't afford to elect the wrong person in 2016.

TPM

11:03 am          Comments

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