Friedman in the News

An article from the Providence Journal written in May 2009 heralds Obama as a savior for re-asserting government's role in economy. Passing the largest budget stimulus in history, preparing an overhaul of the American automotive and banking industries, and his government-funded health care proposal are steps the president has taken and is continuing to push for to rid the United States from its current economic woes.

While the recession has left the American public searching for solutions, Milton Friedman may argue that Obama and his administration are sticking their noses where they don't belong. Friedman argues that government's scope should and must be limited, and that the power within must be decentralized and dispersed. What allows this to occur is free market economy; it keeps the government at bay and is the key to our freedom.

Friedman argues that the government must act as an umpire, overseeing the economy and ensuring the conditions are set for optimal operation of the free market. In principle, Obama is doing that through the stimulus and bailouts. He is putting money into the system to make the system run more efficiently. Whether or not it has achieved its goal is debatable. Writers Rich Miller and Matthew Benjamin explain in their article, "The S&P 500 Index ended the week on April 24 up more that 28 percent from this year's low on March 9; shares of banks that have taken goverment money have soared almost three times as much during that period. Rates on 30-year mortgages have fallen below 5 percent, the lowest in records going back to 1971, as strains in credit markets have eased. Consumer confidence is up and a plunge in retail sales is abating." In this respect, Obama is helping right the economic ship.

One element of this story I am questioning in relation to Friedman is if it was right to bailout these big businesses. I am not sure it was right to give these CEO's a free pass for running their companies into the ground because of irresponsibility and greed. According to Friedman, the only way a society can achieve real political freedom is through competitive capitalism. By bailing out these corporations, it makes me think competition is being eliminated, the foundation of capitalism. If this is the case, are we Americans free? I'm not sure we are.

Marx in the News

Capitalism is still thriving in America, even in these times that it seems like nothing else is. With bank and business bailouts totaling obscene amounts, it has become clear that there is no "bailout" for the common, hardworking members of the middle class.

On the morning of Wednesday, December 3, 2008, employees of Chicago-based Republic Windows & Doors came to work to find out Republic had declared bankruptcy and operations at the plant would end immediately due to the sharp decline in the home construction market. Shocked, the roughly 250 employees later came to collect their paychecks only to be informed that they were not going to be receiving any severance pay, which included accumulated sick and vacation days as well as health insurance benefits.

Soon thereafter, the workers staged a sit-in at the North Side plant. They believed that Republic had violated the Worker Adjustment and Retraining Notification (WARN) Act, which states that companies with more than 100 employees are required to give workers at least 60 days advance notice of mass layoffs and closings. Bank of America, Republic's principle lender, who received $25 billion in federal TARP funds, were amongst those blamed for violation of the WARN Act. The union claimed Republic owed workers over $1 million in wages for the required notification period. After initially declining the union any compensation, Bank of America granted a limited amount of credit to Republic to assist closing costs; however, the union stated this did not constitute a satisfactory agreement. According to the New York times, Republic CEO Rich Gillman stipulated that this settlement need also include funds to pay the leases on his BMW and Mercedes, as well as eight weeks worth of salary.

After several days, it was reported that in the months leading up to the close, company CEO Rich Gillman had been moving numerous pieces of equipment off the floor. It was later revealed that Gillman had purchased Echo Windows, a non-union window factory in Red Oak, Iowa. However, the company was purchased in his wife's name in order to clear his name from any discussion of questionable intentions. Iowa, a place with nowhere near the union power of the Chicago area and a largely agricultural state, was the ideal place for Gillman to move his company. Due to non-unionization, Gillman could pay his workers two-thirds less in Iowa than in Chicago. It now also became clear as to where those pieces of equipment had been mysteriously disappearing to.

This by no means concludes the story, though what I have discussed so far encompasses what is pertinent to Marx. The Republic Windows and Doors situation of late 2008 embodies Marx's "fundamental antagonism" perfectly, in which the the self-interest of the capitalists are fundamentally opposed to the self-interest of the workers. Gillman used the decline in the home construction market as a crisis in oreder to cover up and carry out what he had planned on doing with the company all along. Gillman, a capitalist, purchased Echo Windows in order to gain more capital. He knew that by moving to Iowa, a land with little industry and few to no unions, that he could pay his workers only one-third of what he needed to pay them in Chicago. Granted it is probably more expensive to live in Chicago than in Iowa, cost of living is increasing everywhere. It is clear that Gillman was not at all concerned with the self-interest of the workers. He owned a business that operated on alienated labor, a system in which one's labor is done for the benefit of another; the capitalist. He intended to use the severance packages of his workers in order to pay for his BMW and Mercedes and flee from Chicago with an extra $1 million.

It is clear that there is no "Worker's Bill of Rights" that protects people from the greed and irresponsibility of some capitalists. Gillman was not the first and certainly will not be the last to be controlled by his own self-interest without regard for anyone he may hurt along the way.


Sources:
http://www.time.com/time/nation/article/0,8599,18655226.html

http://www.chicagocurrent.com/articles/30716-Republic-chief-Gillman-accused-of-using-shell-companies-to-bilk-window-maker

http://www.progressillinois.com/2009/12/9/the-republic-windows-ripple-effect

Locke in the News

For the Locke post, I didn't necessarily choose the most recent or most popular news story. I chose something a bit closer to me that I thought related to Locke well.

I read a letter to the editor at the Joliet Herald News from December 27, 2006 written by fifteen-year Joliet resident, Kurt Bihler. His letter focused on Joliet's Pilcher Park and the flowing artesian well within its confines. The artesian well at Pilcher Park flowed tirelessly since the 1930's and stayed a Joliet landmark for decades, until being capped and sealed around 2004. In his letter, Kurt says he had recently been out having dinner and two elderly ladies in the booth behind him were talking about how much they missed going to the flowing well. One of the ladies explained, "My son used to take me there every week to get my water, and now that it's closed, I never see my son anymore." He goes on to explain about talking to friends and neighbors that have lived in Joliet all their lives, taking them back to great memories at the well. This hits close to home for me. I was born and raised in Joliet. When I was growing up, my father and I went there every week and filled up our empty jugs and bottles. My dad called it "the water spot". It became part of me, as it did for so many thousands of other Joliet residents.

The well was capped and sealed approximately six years ago. The Park District claims there are various reasons it needed to happen. Officials claim pumps were worn out and constantly needed replacing, among other things.

Joliet Park District's Woodruff Golf Course is situated right next to Pilcher Park. One of the obvious components of golf course maintenence is watering. When golfers started complaining to the course managers that the course was just a little dry, they quickly realized the well had to go. The park district was not making any money from a free well, but they were making about $30 per round of golf. I hope the park district is happy. Hopefully Woodruff's fairways have never been greener and the golfers have never been happier. By chasing the money coming in through the golf course, they have erased a timeless piece of Joliet history.

By our observations and discussions in class, we know that water is one of the things in the world in which the possibility of ownership is debatable. Yes, I see that the well is on Park District property; but Park District property is also essentially public property. For me, this means it is a service for the community. Joliet residents became so accustomed to having this resource that it feels unfair to be taken away just like that; especially for that reason. It is not as though the Joliet Park District was struggling financially; there are three public golf courses in town, Woodruff being the least popular. Despite my thoughts on ownership of property and the public element of Park District property, I know the Park District owns Pilcher Park. And by virtue of the fact that the well is on their land makes it theirs; however, I do feel there is some subjectivity to this. This water was seen as the community's water; nobody owned it. Shouldn't the history and signficance of this place pull some weight in deciding whether it stays or goes? Not if profits increase if it goes; there's no question about it. Joliet has several historic sites; apparently this one wasn't historic enough to be kept around. But it was historic to the people, and those who knew and loved it will never forget it.

Overall, it's the Park District's land and that's all there is to it. I bet they're really hoping we all go run out and buy a set of golf clubs.

Aristotle in the News

It seems almost commonplace at this day in age, hearing reports of countless corporations winning record profits. Corporations have become something of an unstoppable force in society today and their profit balloons seem to be swelling to cartoonish sizes that just refuse to pop. Aristotle is correct in his statement, "No bound to riches has been fixed for man." However, this big money mentality was not the philosophy he strove to impress upon people.

This time it is West Coast-based financial monster Wells Fargo that is cashing in with a reported $3.2 billion earning. This doubles their mark recored one year ago. To Aristotle, riches encompass more than solely monetary means. One could attain wealth through service to others or honing a craft, learning to play an instrument or raising a family. Activities such as the preceding, according to Aristotle, would fulfill one's life with the fruits of their labor. Taking part in such activity is part of Aristotle's "art of acquisition", a bringing forth of riches to a person or community. With this in mind, should Wells Fargo or any other corporation be subject to distribute a portion of their monetary wealth to other, less fortunate groups with the hopes of attaining profit other than in monetary form sometime in return? Should Wells Fargo be sending aid to the Haitian government right now to fulfill what Aristotle might deem a mandatory humanitarian duty? This may be an unrealistic expectation and an infringement on the rights of corporate America. Because of this, Aristotle's philosophy on acquisition of wealth should be buried in the past.

Source: http://money.cnn.com/2009/10/21/news/companies/wells_fargo/?postversion=2009102112