Re: BBC: US 'may not veto UN resolution on Jerusalem'
2010-04-01 01:07:19 GMT
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http://louisproyect.wordpress.com/2010/04/01/mina-khanlarzadeh-replies-to-yoshie-furuhashi/ _______________________________________________ pen-l mailing list pen-l@... https://lists.csuchico.edu/mailman/listinfo/pen-l
| If the US imposed sanctions on Israel or cut off a billion or so in aid that would be quite significant. At the same time as this flap is going they are shipping new fighter planes to update the Israeli air force. The significance may be that even more money will go to Republicans and even more wrath will fall upon Obama from the Israel Lobby.|
--- On Wed, 3/31/10, hari kumar <hari6.kumar-Re5JQEeQqe8AvxtiuMwx3w@public.gmane.org> wrote:
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ken hanly wrote: > If the US imposed sanctions on Israel or cut off a billion or so in aid that would be quite significant. At the same time as this flap is going they are shipping new fighter planes to update the Israeli air force. The significance may be that even more money will go to Republicans and even more wrath will fall upon Obama from the Israel Lobby.< one of the conclusions I came to from the flap about Mearsheimer and Walt's THE ISRAELI LOBBY is that it's more accurate to talk about "lobbies" (plural). Even the powerful AIPAC can't claim to truly monopolize pro-Zionist or pro-Likud influence-mongering in US government. It's not like it's some sort of unified conspiracy as much as an alliance with the US policy elite (that's willing, for example, to make some sacrifices in US-Saudi relations to keep Likud-Israel happy and some in US-Israeli relations to keep the Saudi government happy). If the Israel Lobbies cut off some funds to Obama, it's possible that will encourage him to stand up to the Lobbies more (since he'll have less to lose). Hope springs eternal... -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list pen-l@... https://lists.csuchico.edu/mailman/listinfo/pen-l
http://www.truthout.org/the-crisis-motor-capitalism58234 Crisis: The Motor of Capitalism Monday 29 March 2010 by: André Orléan | Le Monde Capitalism's history coincides with the history of its crises. Over the 1970-2007 period, there were at least 124 banking crises, 208 exchange rate crises and 63 sovereign debt crises! Even though most of those crises remained restricted to peripheral countries, this nonetheless remains a very alarming fact. In the face of such figures, the idea of market self-regulation appears inadequate. To understand how capitalism manages its excesses, it seems that the alternative theory of regulation through crises does not lack for arguments. If one needs proof, one need only consider those crises we call "great" or structural crises. Since they are periods of deep transformation, their role in the historic development of capitalism is crucial. The most famous of these great crises is the Great Depression (1929-1939). At issue are deep crises, not only quantitatively by their intensity, but also in the scope of the institutional transformations that they initiate. These crises originate in the exhaustion of a growth model that no longer succeeds in containing its own imbalances. To pick up again, the economic system needs new rules of the game, new institutions, new compromises. That is what's at stake with the great crises: reinventing a new growth model. Thus, during the 1929-1945 period, capitalism had to transform itself by putting forward a plan no longer based on all-out competition, but on a permanent adequacy - centered around the big industrial company - between real salary increases, productivity gains and growth. This model that emerged at the end of the Second World War was designated by terms such as "Fordist regulation," referring to Henry Ford, who had understood that in order to be able to sell his cars and make profits, his workers had to be well-paid. After leading to an exceptional prosperity, known in France as the "trente glorieuses" [thirty glorious years] (1945-1973), the Fordist regime in its turn entered a crisis. That was the stagflation of the 1970's (1973-1982), which combined weak growth and inflation in an unprecedented way. Although that great crisis differed from that of 1929, its significance remains the same: the end of an era and the advent of a new form of capitalism. Consequently, in the beginning of the 1980's after stagflation, financialized capitalism, also called "patrimonial capitalism" or "neoliberal capitalism," emerged. The rupture with the preceding regime was colossal, especially in the scope of financial deregulation. We witnessed the progressive dismantling of the regulatory framework which - a significant fact - had led to the elimination of any banking crisis during the Fordist period between 1945 and 1970. Politically, it was the ascension of the neoliberal governments of Margaret Thatcher in the United Kingdom (May 1979) and Ronald Reagan in the United States (January 1981) that marked the outset of this new phase. However, from the viewpoint of economic regulation, the origins of this new capitalism were to be found in the revolutionary transformation which characterized monetary policy. Inflation had become the primary target. To fight it, Paul Volcker, who was installed at the head of the American Federal Reserve (Fed) in 1979, proceeded to an astonishing increase in short-term interest rates, which reached 20 percent in June 1981. That policy generated a complete and definitive change in the balance of power between borrowers and lenders - in favor of the latter. From then on, holders of financial assets no longer risked seeing their profitability eroded by inflation. Their field was clear. That was the beginning of a twenty-five year period the central characteristic of which was to place market finance at the center of regulation, well beyond the mere technical question of financing. In simple terms, from then on it was the financial markets that controlled property rights, something never known before. In the preceding capitalisms, capital ownership was exercised in the form of majority control within specific structures outside the market, as for example in the German Hausbank ("house bank") or family control. The emblematic representative of patrimonial capitalism is the institutional investor. The institutional investor is the bearer of a new form of corporate governance, centered on "shareholder value." The crisis that began in August 2007 must be understood, I believe, as marking the onset of the limits to patrimonial capitalism and its entry into a great crisis. Like the preceding capitalisms, it succumbed when the very principle of its dynamism turned against it to become the source of imbalances. In this case, it was the financial question that proved decisive. Patrimonial capitalism no longer succeeds in controlling the expansion of its financial sector, the weight of which became a handicap at a certain threshold. To see that, let's consider the total indebtedness of the United States, adding up all sectors. Between 1952 and 1981, during the Fordist period, the growth of total debt remained moderate, from 126 percent to 168 percent of GNP. During the neoliberal phase, that same ratio exploded, to reach 349 percent in 2008! The same was true for the total of US financial assets. That aggregate remained stable throughout 1952 to 1981, at four to five times GNP, to start growing subsequently to over 10 times GNP in 2007. At the global level, one sees the same thing: total financial assets, worth 110 percent of global GNP in 1980, reached 346 percent in 2006. Although initially financial expansion actively contributed to the formation of neoliberal growth, it appears that it has become disproportionate today. Think that this sector appropriated 40 percent of total American profits in 2007, versus 10 percent in 1980, while it represents but 5 percent of salaried employment. The disproportion and excess are extreme. The financial sector weighs down the rest of the economy through numerous channels. First, through profitability requirements. The financial globalization of property rights has given shareholders - with institutional investors acting as surrogates - unprecedented power. It has allowed the emergence of normative returns for listed companies of around 15 percent. This profitability requirement is untenable in the long term. Too few industrial activities offer such elevated profitability. Consequently, in the absence of [sufficiently] profitable employment for it, companies have been led to return capital to shareholders in the form of dividends and stock buy-backs. We know that in the United States net issues of shares have been negative for about fifteen years. In other words, the American stock market is financing shareholders and not the opposite. Because it impedes the growth of developed countries and feeds outsourcing strategies, this required profitability leads to an important reduction in manufacturing employment in Europe and the United States. The second consequence may be deduced immediately: strong pressure on salaries. It results from a very unequal balance of power between shareholders' unified representation and an extreme fragmentation of union organizations. In consequence, while under the Fordist regime a significant share of productivity gains went to employees, which fed the dynamism of demand, that is no longer true under patrimonial capitalism. Real salaries stagnate, which constitutes a permanent brake on economic growth; hence households' recourse to debt, with the effects that we know. The third consequence is a massive rise in inequalities. In fact, an essential characteristic of the new corporate governance is to have swung senior management over to the owners' side. That's the entire issue of new compensation rules that aim to align management's interest with those of the shareholders. The result has been an explosion of inequalities in developed countries. The multiplier of the average worker's salary to reach the top managers' salary has gone from 40 to 500 in the United States. Even more disturbing: if one considers the 90 percent of less-rich workers and compares their average income to the average income of the richest one percent, then - although during the 1933-1973 period a certain catching up was observed - over the 1973-2006 period (33 years), one observes that in real terms, the average income of the former has shrunken slightly even as it has increased 3.2 times for the latter. Such inequalities have political effects as well as economic impacts. Ultimately, the unity of society as a whole is imperiled. It is striking to observe to what extent the markets have shown themselves incapable of deflecting or even of simply moderating these imbalances. It's a lesson that must be kept in mind. So, according to the theory of financial efficiency, competition should have increased consumers' (in this case, mortgage borrowers') well-being by supplying them with good-quality products capable of containing the risks associated with acquiring property at low cost. It was in the name of such a result that market liberalization was justified, not to increase bankers' bonuses. None of it happened. Similarly, attracted by the high compensation, a great many of our best-trained engineers migrated to the financial sector. Is that a satisfactory situation when we think about all the technical challenges we have to confront? The onset of the crisis corresponded to the moment when these imbalances took on such a magnitude that the cohesion of the whole found itself at risk. Then the question of a new regulation was posited. However, the crisis does not offer any ready-made solution. Far from it: initially, the crisis does nothing but aggravate the problems, since it accentuates the tendencies peculiar to patrimonial capitalism. Let's take the financial question, the critical role of which we've seen. During the last fifteen years, the banking sector has evolved towards a high degree of concentration around a small number of very big banks. This development is problematic, because it produces giants which, by virtue of their size, carry systemic risk. In consequence, the public authorities find themselves forced <i>de facto</i> to come to these institutions' assistance should difficulties arise. All economists agree that such a situation is not acceptable. It leads these actors to take excessive risks, since their profits revert to themselves, while their losses are socialized. Yet the crisis and the emergency measures taken by the public authorities have accentuated concentration in the banking sector. Bear Stearns, Lehman Brothers, Merrill Lynch, Wachovia and Washington Mutual having disappeared; the remaining banks have become even more sizable. In other words, the banks that were already too big to fail have become even bigger! Under these circumstances, to dismantle enormous conglomerates, for example by separating investment banks from deposit banks, should be a primary objective. A bank too big to fail should also be too big to exist. But such a policy presupposes a profound change of mind. At present, that seems a very remote prospect. Overall, the G20 continues to think within a neoliberal capitalist framework. However, if this diagnosis is correct, the persistence of the crisis will necessitate a paradigm change. The difficulties to come are of two orders: not only the maintenance of massive unemployment in developed countries, but also the development of significant monetary difficulties. Note that up until now, the crisis has been primarily of a financial and banking nature. The public authorities have succeeded in controlling it thanks to their vigorous wielding of the monetary weapon. Simply put, they've drowned the difficulties in liquidity with the active help of central banks. However, today, the mass of liquidities thus produced, associated with the vertiginous growth in public debt, brings the crisis into a new stage in which the question of currency values enters the spotlight. In this matter, the sites for a possible rupture exist: for example, the dollar's hegemony, the unity of the Euro zone, the parity of the yuan - or the weakness of the pound Sterling? Should such a rupture occur, then the cohesion of international neoliberalism would find itself called directly into question. The forces of shock that surfaced in August 2007 have not yet finished making felt their devastating effects. André Orléan is an economist. Born in 1950 in Paris, administrator of the Insee [French national institute of statistics and economic studies], this former polytechnicien has been director of research at CNRS [French national center for sociological research] since 1987. He has also been a member of the scientific council of the Commission des opérations de Bourse [Commission for stock exchange operations], which merged in 2003 with the Conseil des marchés financiers [Financial Markets Council] to form the Autorité des marchés financiers [Financial Markets Authority] (AMF). Since 2006, he is director of studies at the Ecole des hautes études en sciences sociales [School for advanced studies in the social sciences] (EHESS). He is on the management committee of the review, "Annales. Histoire, sciences sociales" and the author of several books, including "Le Pouvoir de la finance" [The Power of Finance] (Odile Jacob, 1999). Translation: Truthout French Language Editor Leslie Thatcher. _______________________________________________ pen-l mailing list pen-l@... https://lists.csuchico.edu/mailman/listinfo/pen-l
On the new global Keynesianism of the IMF.
---------- Forwarded message ----------
From: "Mark Weisbrot, CEPR" <cepr <at> cepr.net>
Date: Apr 2, 2010 12:16 PM
Subject: IMF Changing Slowly, But How Much?
CENTER FOR ECONOMIC AND POLICY RESEARCH
IMF Changing Slowly, But How Much?
By Mark Weisbrot
This column was published by The Guardian Unlimited on April 1, 2010. If anyone wants to reprint it, please include a link to the original [http://www.guardian.co.uk/commentisfree/cifamerica/2010/apr/01/imf-wall-street-banks].
Over the past year or two the IMF has made some positive changes in policy and in their published work, some of which challenges the conventional wisdom among central banks and even the past practice of the IMF itself. The Fund, which prior to the current decade was one of the most powerful financial institutions in the world, has presided over a number of economic disasters and was widely seen ? at least in the low-and middle-income countries to which it has lent for the past four decades ? as generally doing more harm than good. Now there is debate over how much it has changed, and what these changes mean for the IMF itself and its role in the global economy going forward.
First, the good news: last year the IMF created some $283 billion of its reserve currency, Special Drawing Rights (SDRs), available for borrowing by its 186 member countries. This is exactly the kind of thing that should be done in a world economic downturn. It is similar to the "quantitative easing" ? i.e. creating money ? that the U.S. Federal Reserve and the Bank of England have done during the recession. Although the IMF is not a world central bank, in this case it was acting as one, in a positive way. And the SDRs were made available to member countries without any conditions attached ? something the IMF has never done before. Unfortunately, the SDRs were allocated according to each country's IMF quota, which meant that the high-income countries got the bulk of the money. And of course most of the low-income countries can't afford to take on more debt. Nonetheless, this was a positive step for the IMF toward developing countries.
The IMF has also recently published some interesting papers which indicate a re-consideration of their views on some important policy issues. The first, entitled "Rethinking Macroeconomics," was co-authored by the IMF's chief economist Olivier Blanchard and released on February 12 [http://www.imf.org/external/pubs/ft/spn/2010/spn1003.pdf]. In this paper the authors question a number of orthodoxies: is the 2 percent inflation target that is common among central banks too low? Should central banks in some countries target the exchange rate? This kind of re-thinking could lead to governments having more room to pursue policies that lead to higher employment.
The second paper, "Capital Inflows: The Role of Controls," is even more important [http://www.imf.org/external/pubs/cat/longres.cfm?sk=23580]. In this paper the authors suggest that government controls on capital inflows may help countries be less vulnerable to economic crises. Recall that in the 1990s the IMF, together with the U.S. Treasury department, pressured Asian countries such as Indonesia and Thailand to remove restrictions on capital inflows. This was a major contributor to the Asian financial and economic crisis of the late 1990s, which was brought on by a sharp reversal of the large capital inflows that came in after this de-regulation. The IMF has generally favored removing restrictions on capital flows, despite the fact that there has never been much empirical evidence in favor of such de-regulation.
These papers indicate perhaps an unprecedented level of rethinking at an institution that has represented a conservative orthodoxy for decades. The question is, how much can we expect it to lead to a change in the IMF's policies ? most importantly, the conditions it attaches to lending?
This is where the bad news comes in. In the last few years, the IMF has continued with a long-held double standard: it supports counter-cyclical policies ? i.e. expansionary fiscal and monetary policies during a downturn ? for the high-income countries, but not so much for low and middle-income countries. In a study of 41 countries that had current agreements with the IMF in 2009, we found that 31 of these agreements had involved tightening either fiscal or monetary policy, or both, during a downturn [http://www.cepr.net/index.php/publications/reports/imf-supported-macroeconomic-policies-and-the-world-recession/]. This contrasts sharply with what the IMF recommends for the rich countries like the U.S., which is running very large budget deficits and the Fed is holding policy interest rates at near-zero, and has created hundreds of billions of dollars in order to counter-act the recession (although our own stimulus has still been much too small relative to the fall-off in private demand; hence the loss of 8.5 million jobs and the bleak employment picture for years to come.)
Some of the IMF-sponsored macroeconomic policies that have provoked so much ire in the past continue today. The Fund is currently squeezing Ukraine, for example, to reduce its spending, and suspended its disbursement of funds to the government in order to force budget tightening. This despite the fact that Ukraine's economy shrank by about 15 percent last year, and its public debt was only 10.6 percent of GDP. A country in this situation should be able to borrow as needed to stimulate the economy, and reduce its deficit after it has accomplished a robust recovery. In nearby Latvia, the IMF and European Commission are lending with conditions that have already resulted in the worst cyclical downturn on record [http://www.cepr.net/index.php/publications/reports/latvias-recession-cost-of-adjustment-internal-devaluation/], and it is not clear when or how fast the economy will eventually recover.
It also remains to be seen whether the IMF will follow through and change its actual policy on capital controls. If it were serious, it could actually help countries design and implement such policies successfully. But the Fund's agreement last year with Ukraine, a country that seems to have successfully used capital controls during the downturn, called for these to be phased out.
Most bad policies result from either the power of special interests or ideologically-driven mistakes. The Fund appears to be gradually re-thinking some of its ideologically-driven mistakes, which is a good thing for the institution ? and because it is influential, for the world. But the problem is that it is still run by "special interests." First, it is controlled by the finance ministries of the high-income countries ? principally the U.S. Treasury department. The borrowing countries have practically no say in decision-making; the 2006 changes in voting shares lowered the rich countries' majority from 52.7 to 52.3 percent, and proposed changes will take it to 50.9 percent [http://www.cepr.net/index.php/publications/reports/imf-voting-shares-no-plans-for-significant-changes/]. No significant change there since 1944.
But there is another obstacle to policy change at the Fund that is equally important: within the G-7 governments that run the IMF, their finance ministries are also dominated by special interests. This is certainly true of the U.S. Treasury Department, which has had a disproportionate number of personnel that were previously employed by Goldman-Sachs. To see how influential these corporations are in the U.S. government, we need only look at the "nothing-burger" legislation that the Congress is considering for financial reform, despite massive public anger and the financial sector's well-publicized excesses in the bubble years leading up to the recession. How much change can we expect from the IMF on such key issues of capital controls while Wall Street and European banks [http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/latvia-shows-damage-far-right-economic-policy-can-do/] still hold sway over the Fund's directors?
Mark Weisbrot [http://www.cepr.net/index.php/mark-weisbrot/] is Co-Director of the Center for Economic and Policy Research in Washington, D.C. He is also president of Just Foreign Policy [http://www.justforeignpolicy.org/].
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Introductory remarks on getting up to speed with youtube and why. Followed by Jeff Sommers's talk on Latvia at the last Left Forum. http://louisproyect.wordpress.com/2010/04/03/my-youtube-maiden-voyage/ _______________________________________________ pen-l mailing list pen-l@... https://lists.csuchico.edu/mailman/listinfo/pen-l
Louis Proyect posted: > http://www.truthout.org/the-crisis-motor-capitalism58234 > Crisis: The Motor of Capitalism > Monday 29 March 2010 > > by: André Orléan | Le Monde 1) crises definitely are part of the "motor of capitalism," but then again, so are class struggles. Both cause important institutional (structural) change. 2) I wish people would stop giving Henry Ford credit for the invention of "Fordism" (under which real wages grow with productivity, providing mass markets for mass production). Ford raised wages to lower the amount of worker turnover. Period. The rise of so-called "Fordism" in the US came due to the class struggles during the 1930s and after -- and the relative power of the US (and W. Europe) in the imperialist world system (which allowed "Fordism" to occur and operate as advertised). It didn't work so well in dependent countries such as Argentina. (Mike Davis says that "Fordism" should really be called "Kaiserism," after Henry J. Kaiser, since the latter's management policies fit with leftist ideas of "Fordism" better. Of course, that sounds bad.) 3) Given this article -- and the one by Mark Weisbrot that Julio posted -- it looks like we will still have neoliberalism for quite some time. So we should expect some sort of neoliberal bubble and crash in the future (likely after a sustained period of stagnation). -- -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list pen-l@... https://lists.csuchico.edu/mailman/listinfo/pen-l
Jim Devine wrote:
2) I wish people would stop giving Henry Ford credit for the invention
of "Fordism" (under which real wages grow with productivity, providing
mass markets for mass production). Ford raised wages to lower the
amount of worker turnover. Period. The rise of so-called "Fordism" in
the US came due to the class struggles during the 1930s and after --
and the relative power of the US (and W. Europe) in the imperialist
world system (which allowed "Fordism" to occur and operate as
advertised). It didn't work so well in dependent countries such as
Argentina. (Mike Davis says that "Fordism" should really be called
"Kaiserism," after Henry J. Kaiser, since the latter's management
policies fit with leftist ideas of "Fordism" better. Of course, that
Interesting question - did H. Ford invent Fordism. First, one must acknowledge two senses of Fordism - a "wide" sense, i.e., as a mode of regulation or a social structure of reproduction, and a narrow sense, as a specific form of the organization of production based upon previous practices but incorporating a new element, the moving line.
In terms of the "wide" sense, as far as I know, the concept of Fordism as a "mode of regulation" which links mass production to mass consumption enters modern political economy from a book by Aglietta. Did H. Ford have any notion/sense of this linkage and its medium run potential? Clearly, yes. Read Ford's My Life and Work where Ford (through a ghost writer) explicitly discusses the idea that high wages enable workers to consume more mass produced goods.
(BTW, what is "leftist" about Fordism - Fordism is merely a temporary solution to the Capitalism's fundamental tendency toward overproduction and many have argued that the failure to raise wages in the 1920 combined with a doubling of productivity is one of the causes of the Great Depression).
In the second sense, the narrow sense, Henry Ford, in fact, had very little to do with the creation of mass production at the Ford Motor Company. In fact, three years before MP was implemented at Highland Park, Ford observed an experiment in moving assembly hastily set up by Sorenson(I believe) on Sunday afternoon in the 3rd floor of the Piquette Ave factory and rejected it out of hand saying "that way of building cars will ruin the company." Why was it implemented three years later? Because conditions were decidedly different. Certainly labor turnover was a problem but the greater problem was producing enough vehicles to meet demand. Under the existing organization of production, this entailed the ruthless "driving" of workers, most of them skilled and semi-skilled, who would leave after a few months because of the pace of production. There were also physical/spatial limitations on how much further production could be expanded. Moving assembly (which was created by Ford's underlings practically independent of Ford's supervision or knowledge) was the solution. It increased productivity while simplifying most jobs in the factory and thus making it fairly easy to replace workers. In effect, the problem of labor turnover was solved by MASS PRODUCTION and NOT the five-dollar wage. The five dollar wage was implemented not in response to the past problems but in anticipation of future problems of labor turnover. The significant increase in productivity resulting from mass production was achieved through a previously unknown and technically impossible intensification of work and it was believed by Ford et.al. that this would start a new round of labor turnover. Hence, the $5 dollar way was implemented to prevent future turnover and it was effective. Interestingly enough, not all Ford workers, only good "Americans" received the $5 wage. "Good Americans" were certified by the Ford Sociological Dept. which went to the worker's homes and inspected their working conditions.
New York TIMES / April 3, 2010 Contesting Jobless Claims Becomes a Boom Industry By JASON DePARLE WASHINGTON — With a client list that reads like a roster of Fortune 500 firms, a little-known company with an odd name, the Talx Corporation, has come to dominate a thriving industry: helping employers process — and fight — unemployment claims. Talx, which emerged from obscurity over the last eight years, says it handles more than 30 percent of the nation’s requests for jobless benefits. Pledging to save employers money in part by contesting claims, Talx helps them decide which applications to resist and how to mount effective appeals. The work has made Talx a boom business in a bust economy, but critics say the company has undermined a crucial safety net. Officials in a number of states have called Talx a chronic source of error and delay. Advocates for the unemployed say the company seeks to keep jobless workers from collecting benefits. “Talx often files appeals regardless of merits,” said Jonathan P. Baird, a lawyer at New Hampshire Legal Assistance. “It’s sort of a war of attrition. If you appeal a certain percentage of cases, there are going to be those workers who give up.” When fewer former workers get aid, a company pays lower unemployment taxes. Wisconsin and Iowa passed laws to curtail procedural abuses officials said were common in cases handled by Talx. Connecticut fined Talx and demanded an end to baseless appeals. New York, without naming Talx, instructed staff employees to side with workers in cases that simply pit their word against those of agents for employers. Talx officials say they have been unfairly blamed for situations caused by tight deadlines, confusing state rules or uncooperative employers. Talx cannot submit information about idled workers, they say, until clients give it to them. They say Talx improves the unemployment system’s efficiency by mastering the complexities of 50 state programs, allowing employers to focus on their businesses. “We can speed the whole process, rather than bog it down,” said Michael E. Smith, a senior Talx executive. “The whole idea is to protect those employees who have lost their job through no fault of their own and make sure they get unemployment insurance.” Mr. Smith said employers, not Talx, control decisions about which cases to contest. “We just do what the client asks us to do and leave it to the state to decide,” he said. Advocates for the unemployed cite cases like that of Gerald Grenier, 47, who spent four years as a night janitor at a New Hampshire Wal-Mart and was fired for pocketing several dollars in coins from a vending machine. Mr. Grenier, who is mentally disabled, told Wal-Mart he forgot to turn in the change. Talx, representing Wal-Mart, accused him of misconduct and fought his unemployment claim. After Mr. Grenier waited three months for a hearing, Wal-Mart did not appear. A Talx agent joined by phone, then seemingly hung up as Mr. Grenier testified. The hearing officer redialed and left an unanswered message on the agent’s voicemail. The officer called Mr. Grenier “completely credible” and granted him benefits. Talx appealed, claiming the officer had denied the agent’s request to let Wal-Mart testify by phone. (A recording of the hearing contains no such request.) Mr. Grenier won the appeal, but by then he had lost his apartment and moved in with his sister. “That was a nightmare,” he said. In the case of Dina Griess, Talx and its client, the subprime lender Countrywide Financial<http://topics.nytimes.com/top/news/business/companies/countrywide_financial_corporation/index.html?inline=nyt-org>, were involved in what a judge deemed an outright fraud. Ms. Griess worked for Countrywide outside Boston and quit as it collapsed in 2008, saying she was distressed by internal investigations of lending practices. People can receive unemployment benefits if they quit for “good cause,” like unsafe working conditions, but Talx argued that Ms. Griess did not meet the legal standard. She won benefits at a hearing that Talx and Countrywide skipped, but Talx successfully appealed, saying that the Countrywide witness had missed the hearing because of a family death. Later asked under oath if that was true, the witness said, “No, it’s not.” A Massachusetts judge reviewing the case, Robert A. Cornetta of Salem District Court, denounced the deceit. “The court will not be party to a fraud,” he said, in ruling for Ms. Griess. Despite the large role that Talx and other agents play in a program that spent $120 billion last year, the federal Department of Labor has done little to measure their impact. Talx declined to make clients available to interviews, citing pledges of confidentiality, and none of those contacted chose to comment. Other major employers that have used Talx include Aetna, Best Buy, FedEx, AT&T, Marriott, Home Depot, McDonald’s and the United States Postal Service. (The New York Times uses Talx for a different service, to answer inquiries from lenders about its employees’ earnings.) Talx entered the business brashly, buying the industry’s two largest companies on a single day in 2002. In the next few years, it bought five more. Until then, Talx had never handled an unemployment claim, and skeptics wondered how well it could blend seven companies in an unfamiliar industry. The Federal Trade Commission argued in a 2008 antitrust complaint that the acquisitions, which cost $230 million, had allowed Talx to “raise prices unilaterally” and “decrease the quality of services.” Talx modified some contracts to settle the case, but admitted no legal violations. Financially, the gamble paid off: Talx was acquired three years ago by Equifax, the credit-rating giant, for $1.4 billion. But work once done locally became centralized — at a loss, critics say, of responsiveness and expertise. Wisconsin officials were among the first to complain, passing a law in 2005 to prevent what they called a common Talx practice: failing to respond to requests for information, only to appeal when workers were awarded benefits. That clogged the appeals docket and drained the benefits fund, since money sent to ineligible workers was hard to get back. While the law brought about quicker participation, said Hal Bergan, the state’s unemployment insurance administrator, the company’s overall speed and accuracy “still leaves something to be desired.” Indeed, years of e-mail messages, obtained through an open records law, show a continually exasperated Wisconsin staff. While a few cited improved performance, others complained that Talx “returned half-empty questionnaires,” sent back “minimal or ‘junk’ info,” reported in error that applicants were dead, filed “frivolous protests” and caused “the holdup of many claims.” “Same problems as always,” wrote Amy Banicki, a senior manager, in a 2008 e-mail message. “Talx is Talx.” Iowa passed a similar law in 2008 to curtail unnecessary appeals. Of the 10 employers who most often appealed after skipping initial hearings, officials said nine were represented by Talx, including Wal-Mart, Cargill and Wells Fargo, Target and Tyson Foods. Connecticut cited “frivolous motions” and “unnecessary delays” in filing a complaint against Talx under a law that regulates employer agents. Without admitting fault, Talx paid a $12,000 fine and agreed to tell clients in writing that it would not file baseless appeals. While there is no comprehensive research, the Department of Labor did an internal study of 2,000 cases in 2007 and found Talx significantly slower and less complete in answering auditors’ questions than employers who handled their own claims. Officials said they did not release the study, which drew on seven states, because they could not ensure it was representative. The New York Times obtained it under the Freedom of Information Act. Talx supporters say that states impose tight deadlines, often giving Talx just a few days to answer requests. They say Talx is working with states to develop a common computer format which will help provide the data more rapidly, offering a possible solution for delays. They also say scrutiny of claims by companies like Talx helps deter fraud. “Increased vigilance is an appropriate thing,” said Douglas J. Holmes, president of UWC, a Washington group that represents employers on unemployment issues. “Integrity is important.” But other say Talx, by promising to save clients money, has an incentive to fight even legitimate claims. In marketing materials, it warns employers that “a single claim can result in a higher tax rate” and promises “we deliver increased winning percentages.” Joseph Walsh, deputy director of Iowa’s employment security agency, said, “We are more likely to see a claim of misconduct that is completely unsupported by the factual record” when agents are involved. Officials in the New York State Department of Labor were so concerned last year about the credibility of agents that they warned staff members against taking their word over that of jobless workers. Absent other evidence, the officials wrote, “give greater weight to the claimant’s statement.” That guidance was relevant in the case of Genssy Frias, a Bronx woman who took a took a maternity leave from a sales job at Lord & Taylor. Ms. Frias said that she tried to return but that her supervisor told her she had been laid off. A Talx agent said Ms. Frias quit because she lacked child care. “We did not hear from her again,” the agent wrote. New York canceled Ms. Frias’s benefits and accused her of lying. In an interview, Ms. Frias said the agent had been deceitful, because she did not disclose that she worked for Talx and implied first-hand knowledge by using the pronoun “we.” Had she identified herself as an agent, officials would have given her statement less weight. A Talx spokeswoman said the agent made a clerical error in writing “we” and called it an isolated incident. Lord & Taylor did not respond to requests for comment. Ms. Frias appealed and presented a babysitter’s note, which vouched that she had arranged for child care. Neither Talx nor Lord & Taylor appeared at the hearing, and Ms. Frias won. “I was thinking, how can they lie like that when they know I didn’t quit,” Ms. Frias said. -- -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list pen-l@... https://lists.csuchico.edu/mailman/listinfo/pen-l