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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Lindsay Lohan
March 26, 2013 at 10:22 AM

Boeing news: Chicago, do we have a problem?

The announcements add up. Boeing will move its Seattle-area flight training operations to Miami. Boeing will lay off 800 machinists. Boeing will cut hundreds of white-collar jobs here, too, moving some airline engineering support to Long Beach, Calif., and some IT work to St. Louis and Charleston, S.C. Officials of both the company and the machinists union downplayed the big job announcement, saying it was not the sign of a down cycle. On the other hand, Intel’s Andy Grove famously said only the paranoid survive. And sometimes even the paranoid don’t make it. Chicago, do we have a problem?

Some of these moves may have an innocent logic. And, as I wrote recently, another headwind for workers will be the rise of a new class of sophisticated robots and automation. Still, when I was talking to Leeham Co. aviation consultant Scott Hamilton recently about another matter, he said the biggest threat to the Washington state aerospace cluster is Boeing gradually shifting work to Southern states.  Boeing has bought more land adjacent to its new 787 assembly in North Charleston, S.C. And South Carolina doesn’t have those pesky unions.

We are, after all, only a branch office. It matters where the chief executive lives. What also continues to live, despite repeated and costly blunders, is a culture combining the imperial CEO, beancounters-trump-engineers, and the ghosts of McDonnell Douglas and Jack Welch. The board of directors has repeatedly failed to assert itself, capping its shameful performance by giving CEO Jim McNerney a hefty raise last year. No consequences. No accountability. Not even a sense of embarrassment. Meanwhile, this “anti-business” state has given Boeing billions in incentives/payoffs to keep work here. Unions have caved to preserve “labor peace.” It may not matter. The highest-quality aerospace cluster in the world simply may not “pencil out.” That’s the Chicago way.

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Comments | More in Aerospace/Boeing, Lindsay Lohan

September 28, 2012 at 10:20 AM

Vote: Do we need more H-1B visas?

So if I understand this right, Microsoft wants to offer money to train U.S. workers in exchange for more H-1B visas to bring in more foreign workers. Microsoft says the shortage of skilled technical workers is at a crisis level, yet I often hear from Americans who say they have the skills but have been passed over for a foreign worker who is cheaper. And this doesn’t even account for all the jobs that have been sent offshore.

The H-1B program has long been controversial, but it didn’t matter as much in the 1990s when jobs were abundant. In addition, we should want America to be a magnet for the most talented workers in the world. Seattle is a shining example of how a metro area open to the world benefits. But this is a tougher sell with 12.8 million Americans officially unemployed, and millions more underemployed. It’s a tougher sell as wage stagnation starts to bite even formerly elite sectors.

You tell me, oh residents of Technostan, and I hope you’ll flesh out the argument in the comments section of this blog (beyond “Talton your an idiot” cq):

Should we have more H-1B visas?

Read on for the best links of the week and the haiku:

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Comments | More in H1-B skilled foreign worker visas, Income/living standards, Jobs/Unemployment, Lindsay Lohan, Microsoft

August 10, 2012 at 10:15 AM

Goldman Sachs vs. the people

Edwin Edwards, the flauntingly corrupt former governor of Louisiana, once bragged that “the only way I can lose this election is if I’m caught in bed with either a dead girl or a live boy.” He won the election and even spoke to a convention of investigative reporters, many of whom had been documenting his misdeeds for years, that I attended in San Antonio in the mid-1980s. The feds eventually got him and sent him to the hoosegow.

Ol’ Edwin should have been a well-connected investment banker. Goldman Sachs, the “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” has been cleared of wrongdoing for its role in bringing on the greatest financial catastrophe since the Great Depression.

If President Obama thinks forcing the Securities and Exchange Commission to back off will improve his campaign funding, he’s as naive as a Goldman muppet. According to Bloomberg, Goldman, which gave lavishly to him in 2008, has reversed course along with the rest of Wall Street and is backing wealthy Republican Willard Milton “Mitt” Romney. So has GE, which Mr. Obama has bootlicked so obsessively.

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Comments | More in Banking, Goldman Sachs, Great Recession, Lindsay Lohan

August 8, 2012 at 9:55 AM

KORUS: Another over-sold trade deal

The new free-trade agreement between South Korea and the United States may be a boon for Washington state. For other states, not so much. South Korea is Washington’s fourth-largest trade partner. Exports have grown from $1.6 billion in 2005 to nearly $3.3 billion in 2011. President Obama has made the so-called KORUS deal the centerpiece of his plan to double U.S. exports over five years, saying it would create 70,000 new jobs.

But free-trade deals have a way of disappointing. The U.S. International Trade Commission predicted that China’s entry into the World Trade Organization would result in only a $1 billion trade deficit; in 2011, the deficit turned out to be $295 billion. The commission now predicts that U.S. exports will outpace imports from Seoul by at least 52 percent. In April and May, after KORUS was in place, the U.S. trade deficit with South Korea rose 63 percent.

Some good boots-on-the-ground reporting comes from Pulitzer Prize-winner David Cay Johnston, who traveled to Seoul. “I think the president suffers from irrational trade exuberance, a view reinforced by my reporting in this city of 10 million people,” he wrote for Reuters. “This deal is likely to turn out badly for American taxpayers and workers, especially autoworkers.”

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Comments | More in Lindsay Lohan, Pacific Northwest economy, Ports of Seattle and Tacoma, South Korea, Trade

August 6, 2012 at 10:00 AM

Racing toward the fiscal cliff

I haven’t written about the so-called fiscal cliff because, against increasing evidence, I hold to Abba Eban’s quote, “When all else fails, men turn to reason.” But maybe not in today’s America.

The fiscal cliff is the set of budget cuts and tax increases that would automatically kick in next year. That is, unless Republicans and Democrats, the Congress and the White House, can agree to new tax and budget provisions, especially the shape of extending the Bush tax cuts. If we fall off the cliff, according to the Congressional Budget Office, the total effect could mean a 3.9 percent contraction in the growth rate of gross domestic product next year.

The fiscal cliff is replacing the eurozone crisis as the big deal facing the U.S. economy. As the New York Times reports, businesses are reducing their investments for fear that reason won’t prevail. “Executives at companies making everything from electrical components and power systems to automotive parts say the fiscal stalemate is prompting them to pull back now, rather than wait for a possible resolution to the deadlock on Capitol Hill.”

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Comments | More in Debt, Debt ceiling debate, Deficit, Lindsay Lohan, Politics and the economy

May 3, 2012 at 10:45 AM

Steady or slowing?

Today the government reported that initial claims for unemployment fell by an unexpectedly large 27,000 to 365,000. The trouble is, we don’t really know what this means. More discouraged workers may be dropping out of the labor force and some states are cutting back jobless benefits. Challenger, Gray & Christmas said that jobs cuts rose 7.1 percent last month 40,599, up 11.2 percent from last April. According to the Economic Policy Institute, the state jobs picture, while still mostly positive, indicates slowing. Also, continuing government job cuts are disproportionately hurting women and minorities.

The more interesting report came from the Institute for Supply Management, whose index of the vast service sector fell much more than expected, to 53.5 in April, down from 56 in March and the lowest since November. Bloomberg notes, “Expansion among service industries may be moderating after a surge in the first quarter that coincided with the strongest pace of job growth in six years.”

The political ramifications of even slower growth aren’t as important as the continued misery for millions of Americans.

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Comments | More in China economy and business, Jobs/Unemployment, Lindsay Lohan, Oil prices, Politics and the economy, Recovery, Working America

March 2, 2012 at 10:10 AM

Vote: Are you back in the stock market?

February reportedly enjoyed its best stock-market run since 1998. But the Great Recession revealed Wall Street as a casino where individual investors are prone to be the losers. Amid all the frauds and dodgy “investments” — and this wasn’t the first time, recall 2001 with Enron and its felonious cousins — the ideal of a shareholder nation for the middle class turned to ashes. Millions of average Americans were financially ruined.

Writing in the New York Times, Phil Angelides, chair of the Financial Crisis Inquiry Committee, asked, “Will Wall Street ever face justice?” We know the answer. Lindsay Lohan has done more jail time than all the big banksters that brought on the crash combined. Meanwhile, the Business Insider blog looks at the high incidence of psychopaths among Wall Street traders.

So, today’s poll. You may select multiple answers:

How are you investing now?

Read on for the best links of the week and the haiku:

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Comments | More in Investing, Lindsay Lohan, Stock market