pulling a Johann, Foxconn edition

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So US public radio put out a documentary in January featuring an imaginative fellow called John Daisey, who produced a hard hitting report on conditions at the Foxconn plants that make various Apple devices, among other things (for the record, the group of employees in Wuhan who threatened mass suicide recently were making Xbox 360s). Anyway, it turned out to be the most popular episode ever, went viral, inspired all sorts of activism, all that good stuff. But:

Daisey's interpreter Cathy also disputes two of the most dramatic moments in Daisey's story: that he met underage workers at Foxconn, and that a man with a mangled hand was injured at Foxconn making iPads (and that Daisey's iPad was the first one he ever saw in operation). Daisey says in his monologue:

He's never actually seen one on, this thing that took his hand. I turn it on, unlock the screen, and pass it to him. He takes it. The icons flare into view, and he strokes the screen with his ruined hand, and the icons slide back and forth. And he says something to Cathy, and Cathy says, "he says it's a kind of magic."

Cathy Lee tells Schmitz that nothing of the sort occurred.

This chap never appeared on film. Maybe it was because he thought the camera would steal his soul. I don’t think you need any more than an absolutely rudimentary awareness of China to find that incredible. By rudimentary, I mean knowing that it makes a huge proportion of the world’s gadgets or that it has massive levels of internet and mobile device penetration and is generally device crazy. Or that a culture in the throes of mass industrialization might in fact be quite materially aware. Above all, would you assume it was a credible assertion that someone on a production line would think their finished product was ‘a kind of magic’ if that production line was in Europe or the US?

The sad thing is that it’s probably this kind of mysticism that helped drive the appeal of the programme: people pretty much like us in most material particulars wanting to earn a decent living’ doesn’t seem to excite much in the way of solidarity. ‘Hands off the munchkins': that’s the way to go.

In fairness, the show has put out a detailed, almost grovelling retraction, which identifies failures in fact checking as the main cause of the problem. I'd say it was more a matter of assumption checking.

i never noticed them before they became infrastructure

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“As you wonder (sic) between locations murmuring to your coworker about how your connection sucks and you can’t download/stream/tweet/instagram/check-in, you’ll notice strategically positioned individuals wearing “Homeless Hotspot” T-shirts. These are homeless individuals in the Case Management program at Front Steps Shelter. They’re carrying MiFi [short-range mobile wireless hotspots] devices…We’re believers that providing a digital service will earn these individuals more money than a print commodity,” wrote Saneel Radia, BBH Labs director of innovation.

The BBH is Bartle Bogle Hegarty, by the way: actually, Bartle Bogle Hegarty ‘Labs’. This ‘Lab’ employs people who can’t spell ‘wander’ to dream up the idea of using the homeless as human plug ins, paid a suggested eight dollars an hour pro-rata. I can just see some semi -autist saying ‘I only used 13 and a half minutes’ and calculating the exact sum owed. ‘I can’t give you any more. That would violate the terms of service’.

Aside from the specific humiliations involved in this for both transactors, it does point to a huge structural economic dysfunction: Chronic homelessness. Semi-illiterates employed in ‘Labs’ producing reams of bullshit. The second feeding off the first.

Perhaps relatedly, sandwich men still thrive, if that’s the term. These days they’re known as human directionals.

Portugal Gradually Shuffles Its Way Up Towards The Front Of The Debt Queue

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Well, a weekend during which Greece seems to have been finally able to pass muster on its bond deal, while Mario Draghi has given the official “all clear” on the debt crisis seems to be as good a moment as any to have a look at where the country which many investors consider likely to be the next to enter the restructuring process is up to.

Speaking after last week’s meeting of the  ECB’s governing council Mr Draghi said  the recent three-year long-term refinancing operation (LTROs) had been an “unquestionable success” and had “removed tail risk from the environment” For the uninitiated “tail risk” is defined by Wikipedia as “the risk of an asset or portfolio of assets moving more than 3 standard deviations from its current price in a probability density function.Such risk is often under-estimated using normal statistical methods for calculating the probability of changes in the price of financial assets”. Continue reading →

Leveson tangent

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Politics drifts back into the frame. It was always suggestive that Andy Coulson was appointed head of communications for the Tories two years after he ran an effective spoiler on the George Osborne cocaine use allegations, despite losing his job in the interim period because of the original Royal hacking affair back in 2006.

Now we have the issue revisited in the light of Bob Quick's revelations this week, and the news that Muclaire, at Coulson's request, was regularly hacking the phones of senior editors at Mirror Group, to whom Natalie Rowe originally took her story. 

How much did they know about how their Mr Fixit (Coulson) fixed things? If the Leveson inquiry is supposed to clean up the press and its relation to politicians, then our two most senior ministers should answer these questions under oath.

Sounds good to me.

Homeric Similes And Spanish Debt

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“Nihil sapientiae odiosius acumine nimio“ (Nothing is more hateful to wisdom than excessive cleverness)
Petrarch, “De Remediis utriusque Fortunae”

Like Leo Messi charging his way through a packed Real Madrid defence, twisting now this way, now that, never stopping without being stopped, so did the Spanish sovereign debt surge forward, breaking directly into the red zone near the penalty box, provoking confusion and consternation amongst horrified EU officials and regulators forced to look on as it blindly sought to touch down somewhere well beyond the authorised 100% finishing line.

Spain’s deficit has been much in the news in recent days. Both the target for this year and actual details of last year’s outcome have been the source of much comment, scrutiny, and consternation, but the deficit itself will not form the primary subject matter of this post. What we will be concerned with here is debt, sovereign debt, and the current trajectory of the Spanish variant. In a recent article in the Financial Times Victor Mallet draws attention to the situation and shows how an excessive emphasis on deficits may sometimes mislead people into missing the bigger picture, since at the end of the day deficits are only interesting as they add to debt, and in the long run what matters – as we have seen in the Greek case – is whether or not the debt itself is sustainable.
Continue reading →

Econolinks: EU trade, Spanish wages, Icelandic debt

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Catching up after being off around Europe. Here’s a links post.

You may recall that the EU fiscal pact included at least some warm words about the idea of limiting excessive trade surpluses (as well as deficits) within the eurozone. This is progress, but of course the devil is in the detail. The European Commission’s demonologists were called in to work out the detail. Jean Quatremer reports:

Ainsi, la balance des comptes courants est censée être comprise entre – 4% et + 6% du PIB au cours des trois dernières années. Et, miracle, celle de l’Allemagne est de + 5,9 % !

I.e. the reference range is defined as a three-year moving average of the current account balance between -4% and +6% of GDP. Why is it not symmetrical around zero? Not that there’s a specific argument that it should be, but it’s telling…because Germany’s CA surplus is exactly +5.9% of GDP. Trebles all round.

For the first time on record, the share of Spanish GDP accounted for by profits exceeded that accounted for by wages.

Iceland’s cramdown of mortgages exceeding 110% LTV is considered beneficial, at least by Bloomberg and by Lars Christensen of Danske Bank.

Trotsky on workfare

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The very principle of compulsory labor service is for the Communist quite unquestionable. “He who works not, neither shall he eat.” And as all must eat, all are obliged to work. Compulsory labor service is sketched in our Constitution and in our Labor Code. But hitherto it has always remained a mere principle. Its application has always had an accidental, impartial, episodic character. Only now, when along the whole line we have reached the question of the economic re-birth of the country, have problems of compulsory labor service arisen before us in the most concrete way possible. The only solution of economic difficulties that is correct from the point of view both of principle and of practice is to treat the population of the whole country as the reservoir of the necessary labor power – an almost inexhaustible reservoir – and to introduce strict order into the work of its registration, mobilization, and utilization.

You'll note that this is much more systematic than Chris 'Lev Davidovich' Grayling's current plan to help out his Party's business mates by giving them free labour underwritten by the taxpayer. On the other hand, Leon and friends did pay his conscripts, at least nominally.

annals of deviationism

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Obviously, Daily Mail stories online are designed as clickbait. But this one is a dead straight exposition of contemporary government psychosis. Spineless capitalists are giving in to tightly knit groups of sinister leftists. The BBC is actually asking government ministers if they can’t see why people might object to mandatory labour for no money. Mimsy old mumsnet has been driven along in the radical frenzy. The police are being ordered to stop demonstrations before they actually happen.

Yes, indeed. Wreckers and saboteurs are at work. False consciousness stalks the land. The relevant economic organs are resistant to co-ordination. Media is failing to follow the line set by the Centre. The plan is in danger of being underfulfilled. The people’s security forces must act without delay. Maybe this is why the government is so fixated on the SWP. If you’re doing parody Stalinism, everybody looks like a comedy Trotskyist. 

Ireland to conduct referendum on the Eurozone fiscal compact

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Irish Prime Minister Enda Kenny has told the Irish parliament today that the government has decided to subject the Eurozone fiscal compact to a popular vote. Although the government was clearly tempted to bypass a popular vote, and there were indications that the wording of the compact had been designed to facilitate this, the calculation clearly was that if they were forced into a referendum by legal action they would definitely lose it, whereas a pro-active campaign can avoid the distractions of legalities and move directly to the big Yes/No question on the compact itself.  In fact, various comments ranging from David Cameron’s initial opposition to the compact to Mario Draghi’s interview with the Wall Street Journal last week had made it clear that many people outside Ireland see sovereignty issues with the compact, and these views would have inevitably informed the debate in Ireland. Having now upped the ante, the government will find it hard to resist the temptation to say the vote is essentially in/out of the Euro and indeed in/out on EFSF support — but the mentality of an already under-water investment banker (go even deeper!) is not necessarily good politics. [Note: the fiscal compact does not need Irish ratification to take effect].  Nevertheless, as with Greece, parties outside the EU consensus will relish the opportunity of the debate.  One thing still to be seen is whether the government has lined up some sweeteners from the troika especially as regards the debt burden from support to the insolvent banks.

Staring Into The Ukrainian Economic And Political Abyss

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It’s been a long time now since Paul Krugman spoke of the Ukraine economy epitomising the arrival of what he then termed the “second great depression“, and its been an even longer long time since we lay awake at night dreaming about the coming conquests of the Orange Revolution. It’s also been a good time since I looked at and wrote about the country, so now may be as good moment  as any to do so. Continue reading →