Designed by Apple in California, Assembled (by Slaves) in China
If you have read other posts you may know that I am not a fan of the introduction of Apple products in public institutions like universities (for the only reason that I do not believe tax-payer monies should be spent on boutique brands). And while I have to grudgingly admire the success of the company, especially its incredibly successful marketing, I have to admit that I am probably more open than most to critical stories about the company and its products. And I will be the first to admit that it is unfair to single out Apple in the above headline because the subject matter of this post in reality is a much wider problem and affects many Western corporations.
What caught my eye today was a story that Foxconn workers were ‘upping’ the pressure on management of the Chinese manufacturing company and threatening mass suicide if their demands over working conditions were not met:
‘Mass suicide’ protest at Apple manufacturer Foxconn factory
Malcolm Moore, Daily Telegraph (Jan. 11, 2012)
http://www.telegraph.co.uk/news/worldnews/asia/china/9006988/Mass-suicide-protest-at-Apple-manufacturer-Foxconn-factory.html
This is not a joke (or an Onion article). Foxconn has become infamous for having to install nets around its factories in order to dissuade its workers from publicly committing suicide to protest unbearable working conditions. This is a fact that I mention to my students as much as I can because it is indicative of the realities of North American technology consumption: our corporations ‘design’ the products, which are then manufactured and assembled in mostly Asian countries where labour is cheap, where labour laws are weak or–more commonly–virtually non-existent, and where rules governing pollution or working conditions are overseen by a authoritarian government (meaning they are really, really bad).
As I said, it is unfair to single out Apple because it is rare to find anything ‘tech’ related today that is manufactured in Western nations and by Western citizens. But Apple stands out because it is considered as a premiere brand and the cult of Apple/SteveJobs is so strong that often its adherents are completely clueless as to how the company operates. I see this constantly where I work as many assume that Apple products are somehow different from the product category in which they come from. Macs, according to Apple Logic, are not PCs, even though the guts of a Mac are the very same components which show up in competitors’ products. In many cases, as with the Apple A5 chip that is found in the iPad 2 and the iPhone 4S, components are actually manufactured by competitors (with respect to the A5, it is made by Samsung). Again, why this is not recognized is all due to the strength of Apple’s pervasive marketing but it still does not paper over the fact (for those paying attention anyway) that Western companies–and by extension the emotional branding and satisfaction that we often derive from a inexpensive tech gadgets–are completely dependent upon the exploitation of people and resources in distant lands. And with a company like Apple that is sitting on a mountain of cash (stashed in overseas bank accounts so as to not have to pay taxes in the U.S.) and which enjoys a seemingly ‘untarnishable’ reputation, it is sad that so many are so misinformed about the actual circumstances surrounding the company’s operations.
Can anyone say, ‘commodity fetishism’?
Where Greece’s Money Actually Goes
This is just an update to a previous post indicating where Greece’s debt comes from… at least in part. And, again, it is not (or not only) lazy Greek tax-evaders that contributes to the country’s debt but the ‘need’ for Greek tax-payers to support Greek and Western banks (through loans/debt) so that they can support French, German, and U.S. arms manufacturers. I mean, how else is Germany, France or the U.S. going to maintain the illusion that they have robust economies? Sadly, Western nations could not survive without the Ponzischem-o-nomics of governments, the financial sector, and arms manufacturing.
See Zero Hedge’s article and the German original at Zeit Online.
peace.
The U.S. Debt Limit; Just More of the Same
Building upon the last post, here is interesting news about the U.S. debt limit:
Obama to Seek $1.2 Trillion Increase in U.S. Debt Limit Dec. 30
http://www.bloomberg.com/news/2011-12-27/obama-to-seek-1-2-trillion-increase-in-u-s-debt-limit-dec-30.html
My favourite line in the article is this:
“Obama may have little difficulty financing a fourth consecutive year of $1 trillion budget deficits after the U.S. government received record demand for its bonds in 2011, pushing longer-maturity Treasuries to their best performance since 1995.”
It’s just so matter-of-fact. The way that governments in the early 21st century pay for its services is simply by selling high-performing debt (translation: by selling the future wealth of its citizens).
I can’t wait to see what happens in three days time.
Peace
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The UK and the EuroZone Debt Crisis
Over the past weeks I have been watching with some amusement as people in Canada boast that we are truly different from all other Western economies in that we are fiscally conservative and responsible economic actors. While their might be some truth to that, no economy is an island and what is more, there are indicators and data that prove otherwise.
Another source of amusement has been Britain. While the EuroZone inches toward financial implosion, other countries (like the U.S. and Canada) pretend that the they are on the road to recovery and that it is Europe (or the uncertainty over Europe) that is holding them back. Then there is the U.K. PM David Cameron has delighted Eurosceptics in his country by talking tough and not participating in any scheme to save Euro banks. And while many in Canada and the U.S. applaud Cameron’s decision for his apparent intent to not expose the U.K. economy to the disaster that is Europe, there are probably other reasons why Cameron does not want to participate in any talks that might include financial reform in Europe: to save the London financial sector.
But before I get to that, I should like to reiterate that the Eurocrisis (just like the financial collapse of 2008) is not (only) a sovereign-debt/lazy-society problem… it is a global banking problem. Sure, Greeks retired early, don’t like paying their taxes, and didn’t work hard enough. But the problem goes well beyond that. Germany is often held up as the EuroSaviour. The hard-working Germans work hard, generate wealth and pay taxes. End of story. But that is not quite true as well as they have a hand int he problem that is the EuroZone. The easiest way to understand this is through the phrase, “It takes two to tango.” Greece (or the other PIIGS) did not get to where they are on their own. If the Greek government has lived beyond its means by taking on too much debt, once must understand that that debt comes from somewhere. And the “somewhere” is primarily other Western economies. The debt that Greece owes is owned by Greek and other Western/European banks. What is more, a lot of that debt was taken on to finance purchases from corporations in those other Western economies. So, it should come as no surprise that, while the discussion of what Greece should do was just getting started, countries like France and Germany threatened Greece that they had to get their economic house in order, but such austerity should not threaten arms purchases from French or German military contractors. (See this article from the Jerusalem Post from May 2010 as an example: http://www.jpost.com/International/Article.aspx?id=176792.) Greece led Euro countries in military spending (measured against GDP, a standard measure of military spending) and much of that spending was for French and German armaments. The hypocrisy did not go unnoticed in Europe and this, in part, points to how misleading it is to only point fingers at Greece in the EuroCrisis. The economies in places like Germany and France are dependent upon countries like Greece overspending, especially for such costly (and mostly useless) expenditures like military spending. (In case you are wondering, the reason why Greece buys so much armaments is because it is in a long-standing rivalry with Turkey.)
As I said, it takes two to tango. More realistically, it takes many to create a debt crisis. The economies of France and Germany, for example, are dependent upon sovereign overspending. Those economies would not seem so strong without it (and that also goes for countries like China and Canada). The global banking system is dependent upon sovereign overspending (on defence and all kinds of social programs like health care and pensions). It is all of a piece. That is why the discourse that the EuroCrisis is the fault of lazy Greeks is so inaccurate: the Western financial system is entirely dependent upon things like Greek overspending and sovereign deficit spending.
And this is how we arrive at the U.K. While Cameron is acting like the responsible steward, steering his country away from the EuroIceberg, the real reason he is walking away from the EuroTable is because he fears any financial regulation… for such regulation would likely stop the PonziSchem-onomics that is the British economy. There is a reason why financial pundits (the honest ones) have called the U.K. (London in particular) as the “ground zero” when it comes to the global financial crisis. And that is because the loosest rules have allowed for all kinds of financial shenanigans that are still coming to light. Case in point is the revelation that when tallying all debt (government, corporate, and individual), no one rivals the Brits… whose debt-to-GDP ratio is somewhere in the 1000% range.
That’s right, U.K. debt-to-GDP ratio is somewhere near 1000%!! (Actually it is around 950%… but, hey, ’1000′ is much more dramatic.)
I am sure that the numbers here will become more transparent in the months to come as more people start poring over the data. For those interested, check out this Zero Hedge article from Dec. 18 (it is from this article that the graph at left is borrowed):
“Psssst France: Here Is Why You May Want To Cool It With The Britain Bashing – The UK’s 950% Debt To GDP” (Dec. 18, 2011)
http://www.zerohedge.com/news/psssst-france-here-why-you-may-want-cool-it-britain-bashing-uks-950-debt-gdp
Much more amusing is Episode 226 of the Keiser Report (the discussion starts around the 14 min. mark):
http://rt.com/programs/keiser-report/episode-226-max-keiser/
And, finally, take a look at Steve Keen’s website (he is the interviewee in the Kesier Report report above)… he is more sceptical of the numbers at the moment but I am sure will have more on this in the future once the data become ore clear:
http://www.debtdeflation.com/blogs/2011/12/23/max-keiser-me-the-uks-950-debt-to-gdp-level/
The point here is that Western economies (and the developing economies that have been serving them) are entirely dependent upon a financial sector that has itself reached gargantuan and absurd proportions relative to the real economies of those nations. All of this was fuelled, in my humble opinion, by the need to maintain the illusion that Western economies are healthy and productive. The U.K. should really be the poster boy of the global financial crisis at perhaps it still will turn out that way. IN the meantime, politicians like Cameron will continue play-acting… but that should not be very surprising either. At any rate, don’t bet on seeing too much in the mainstream media on this until the moment the U.K. economy completely implodes because, as we all know, there are too many Google 2011 ‘Top Search’ lists, Twitter Twends, and celebrity Facebook posts to “report” on.
Peace.
(And may 2012 be better than 2011.)
Let’s Play ‘Capitalism’!! The Bizarre World of Western Financial Markets
For me, yesterday was a bizarre day. On the one hand, a BBC interview with a European trader was making its way through the financial blogosphere where the trader basically said he believed a large, global meltdown in the stock markets would happen in the next twelve months and that politicians worldwide are helpless to really do anything as the financial industry (Goldman Sachs) basically rules the world. On the other hand, rumours that the European zone might come up with some ungodly large amount (I heard 2.5 trillion, which is supposedly not enough) to basically insure that the global banking system will not go belly-up.
Of course, and showing their complete disconnection with reality, the stock markets shot up (hey, rumours of band-aid solutions are as good as anything to trade upon I guess).
And then, this morning, markets are already up as much as they were yesterday because the Greek P.M. went begging, telling potential investors (bail-outers) that they would be investing in the ‘new’ Greece. Consequently, clueless media-talking-heads on the radio, TV, and online are confidently gushing and in Canada this is especially worrying since there are a lot of people that believe the country is fundamentally sound and well-run (even though we have a similar debt-to-GDP ratio as many other countries, governments cannot balance the books (even in Alberta), and most people are themselves over-leveraged).
All this tells me just how much we rely on wishful thinking and good news… and just how much economic activity is based on small amounts of poor quality information. It also shows to me that we have no idea what ‘capitalism’ and ‘free-market economy’ even mean anymore. Let’s survey the situation. Western governments everywhere are living completely beyond their means and when you include future liabilities like health care and pensions, we are essentially bankrupt. The financial/banking system, which is on the hook for billions because of bad loans to governments, has also created an unregulated, derivatives market that is basically one giant casino… except this one deals in the hundreds of trillions (with a ‘T’) of dollars. If this system is not bailed-out by taxpayers world-wide, it will fall in on itself, taking with it the savings and investments and pensions of millions of people across the globe. This system fits the definition of a Ponzi scheme to a ‘T’ (which is of course measured in trillions).
So, for the Western system to continue, we need to have further bailouts… that is, on top of the bailouts of three years ago. And then you have to think of all of the quantitative easings (basically, injecting more monopoly-money into the financial system and stock markets). And, of course, there are all of the government loan-guarantees that are given out regularly (this morning, the promised loan-guarantee for the asbestos industry in Canada is in the news). Oh, and then there are the subsidies and tax-breaks for massive industries ranging from petroleum to agriculture to biotech. And, then there are those industries–communications, aerospace, weapons, defense, etc.–that are dependent upon government spending for the majority of their annual sales. When you add it all up, it seems we capitalists are indeed socialists… or corporate-socialists. (Hmmm… isn’t that partly the definition of fascism?)
At any rate, that pretty much sums up the world economy. I do see more capitalism and competitive markets around me but these are mostly restricted to local, small businesses and entrepreneurs. Anything on a larger scale (where one can afford lobbyists) seems to feed almost entirely from the public trough of make-believe money and the future wealth of taxpayers.
Peace.
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