James Fallows

Continuing the "who's to blame for no mail on Saturday" discussion, previously here and here, we have these new entries from readers.

Heroes of the Anthrax Age. From a reader who, like me, was once on the postal payroll:

I, too, have worked at USPS and am now an executive in a Fortune 50 company.  USPS had a speedy, efficient structure compared to the corporate bureaucracy I now experience.  It's funny, the reactions I receive when I say I once worked at USPS.  Most frequently, I receive condolences.  I quickly object to that sentiment.  Some of the smartest, most hardworking people I have ever met work for USPS in both management and craft jobs.
 
Congress is the real villain here, but it's not surprising.  A perfect example is the anthrax-crisis of 2001.  In the midst of those terrible days when no one knew where or  when the next deadly letter would arrive, the Congress of the United States ran out of DC for weeks.  Postal workers came to work every day.  Within 90 days of the crisis, USPS engineers were testing a new processing machine that would detect bio-hazards in the mailstream and wouldn't disburse deadly contaminents into the air at postal facilities every time the machine was cleaned.  Four months later, USPS began delivering these new machines to processing centers.

The Vol de Nuit factor. Literary allusions from a reader:

I don't have any original thoughts of my own to add to the discussion about the postal service except to add that when it comes to romance and literary inspiration, post office beats electronic hands down.  Just two piece of evidence will suffice:
 
(1)     W.H. Auden's poem for the British post office in the 1930s, "Night Mail". [JF note: seriously, you won't regret clicking on the video below.]
 


(2)     Antoine de Saint-Exupery's novels Courrier Sud (Southern Mail) and Night Flight about the dangers of delivering the air mail in the 1930s...which adds the romance of flight as well.
 
If anyone has written a great poem or novel about sending an email or text message...let me know.

The Sneakernet Factor. Thanks to many readers who sent links to yet another great Randall Munroe xkcd entry, this one about the relative throughput capacities of the internet and physical transport systems.

'Superior in almost every way that matters.' A reader whose business depends on both virtual and physical networks writes:

I work at a small eCommerce company in Redlands, California and know from experience that the federal mail is superior to private couriers in almost every way that matters. They offer the best product at the best rate nine times out of ten. Compromising this service would be devastating to domestic commerce - particularly during the all-important Christmas season/fourth quarter....

As a Constitutionally mandated service aren't talks of why we need the post office just a little bit moot or at the least self-serving (said with all respect) punditry? We're not even talking about an amendment. The original document tells Congress to make post offices and post roads. So isn't this more of a question of: do we have a good post system or a crappy one?

The security factor. A reader makes this basic point:

One great feature of "snail mail"..... privacy!!!   No matter  how much or what is done on computers, safety and privacy are not guaranteed!!.

Right -- security can't be guaranteed in either medium. But it certainly is quicker, faster, easier, and more insidious to follow an electronic rather than a physical "paper trail."

The road not taken. A reader looks back:

I've long thought that the great opportunity for the USPS was to be the primary progenitor of the world-wide-web in the US.  That is to say, the primary ISP and Email service provider; the roles now fulfilled by Comcast, Verizon, and Google.  In the mid 90's, when home web access was all dial-up, the post office could have been as instrumental in bringing local web access to rural America as they did with postal access.  And of course then, very few envisioned cloud storage / transfer services.   USPS could have offered (at a time when no others were in the homeowner / retail space): Security, encryption, delivery confirmation, and SPAM / virus protection.  The existing distributed nature of the USPS would have been perfect in terms of support and transition from 'snail' to electronic media. 

This goes against the notion of smaller less intrusive government, but the alternative notions of real web neutrality and widely available web access would have been the kinds of things that would have helped America in the global technology challenges.  (Of course there would have been the prickly concern over how to handle the enormous amounts of porn...).  And finally, since 9/11 & Google, we must assume that all email and web traffic is subject to monitoring and recording; so they could have had a head start on all that. 

To me, this all goes along with the already deep levels of integration and regulatory relationships between the US Government and Broadcasters, Telecoms, and other public forms of media.  Quite possibly the USPS would not have been a direct service provider but, rather, a facilitator, regulator, and equalizer to ensure all America had access to reasonable service levels at reasonable cost and that various public services were integrated into the web early on.

Too late now, I suppose.  I wonder (and doubt) if Al Gore would have had the vision to pursue this approach had he been elected in 2000. 

That's enough for now. Maybe this crisis will have the silver-lining effect of nudging people away from the reflexive denigration of postal employees, postal efficiency, and "snail mail." Not sure what we can do about "going postal," though.

Here they are:

I don't think Alan Tonelson has so much rebutted the stories by James Fallows and me in this month's "Atlantic" as he has provided some context, albeit pessimistic context.

Manufacturing in the U.S. isn't in good shape at the moment, especially comparatively -- although we are still statistically tied with China as the two nations in the world that produce the highest dollar-value of manufactured goods. To read the press accounts, one would imagine that we produce almost nothing, rather than being #1 or #2 in the world.

For my story, I set out to answer a single question:

Given the last 30 years of relentless offshoring of U.S. factories -- and all the excited explanations about how inevitable, even good, that was in global economic terms -- why would anyone bring assembly lines back to the U.S.?

Why, as the story asks, does it suddenly make sense for GE to manufacture dishwashers in the U.S. -- and not just dishwashers, but the plastic-coated wire racks that go into the dishwashers?

The answer, from GE's Appliance Park, was much more thoughtful and strategic than I imagined.

Neither story argues that we're about to return to the boom years of the 60s and 70s when everything we needed to get through the day, starting with our Fruit of the Loom underwear, was made right here. (The headline, "The Insourcing Boom," may have been a tad enthusiastic; the stories themselves are much more careful.)

The stories make a case that the global manufacturing system is shifting again, that outsourcing may have been overdone, and that manufacturing may achieve a much different balance over the next decade.

Tonelson's data points aren't wrong. But what GE is doing with its appliance division isn't a mere anecdote. It's a strategic bet that might signal a shift in the U.S. economy; and it's a competitive re-positioning that may cause some manufacturing companies to do what GE itself has done: Ask hard questions about where it really should be making products.

After the jump, a reader's response on this exchange.

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The Insourcing Boom that Isn't

By Alan Tonelson [right]

According to the two feature articles in December's Atlantic, manufacturing in the United States is making an historic comeback.  In particular, changes in wages, energy costs, and technology around the world mean that China and other Asian locations no longer hold all the cards as manufacturing locations.  Even better, large and small American businesses increasingly are recognizing that producing - and innovating - back in the United States has become their most lucrative option.

Moreover, both "The Insourcing Boom," by Charles Fishman and "Mr. China Comes to America" by James Fallows state that much more is involved than domestic manufacturing's cyclical rebound from an historically painful recession.  As the former contends, the manufacturing revival "cannot be explained merely by the ebbing of the Great Recession, and with it the cyclical return of recently laid-off workers."  In the latter's words, domestic industry's outlook is better today "than at any other time since Rust Belt desolation and the hollowing-out of the American working class came to seem the grim inevitabilities of the globalized industrial age."

Both authors provide numerous and seemingly impressive examples of insourcing and corporate start-ups that support these claims. They also present statistics on energy prices, U.S. and Chinese wages, and the post-2010 rise in American manufacturing employment.  But neither gives their readers the most important information they need to know about domestic industry's current circumstances and future prospects - that virtually no national- or global-level data show that American manufacturing is even continuing its recovery from recession, much less stealing the march on Chinese and other foreign rivals.  Indeed, nearly all of the most comprehensive statistics portray U.S. industry as still slipping further down the international ranks.

For example, during an historically sluggish American recovery, a U.S. manufacturing sector in renaissance mode should be growing faster than the rest of the economy.  That was true in 2010 and 2011.  But the out-performance is already over.  This year, the entire U.S. economy has expanded by only 2.06 percent after inflation.  Manufacturing output, however, has actually fallen - by 0.54 percent.

A manufacturing sector engineering a big secular rebound should be gaining share in its own home market - the world's largest single national market, and the one its companies should know best.  Yet new government data analyzed by the U.S. Business and Industry Council show that more than 100 advanced domestic manufacturing industries collectively lost American customers to imports worldwide last year.

In 2011, foreign-based producers supplied a record total of 37.57 percent of total American purchases in industries ranging from semiconductors to pharmaceuticals to ball bearings to machine tools and dozens of other capital-and technology-intensive sectors.  In 2010, when the industrial renaissance supposedly was stirring, the import penetration rate was 37.07 percent and in 1997 - the earliest data year - only 24.49 percent.   In fact, imports accounted for half or more of everything Americans bought in nearly a third of these industries, including construction equipment, metal-cutting  machine tools, laboratory equipment, turbines and turbine generator sets, and of course autos and heavy-duty trucks alike.

Companies losing market share rightly are almost never described as winners or viewed as promising.  Do industries losing market share deserve better reviews?

Nor is the growth of exports compensating for these losses.  Since plummeting during the Great Recession as American economic demand nosedived across the board, America's manufacturing trade deficit has rebounded much faster than the economy as a whole, and indeed hit a monthly record earlier this year.  This shortfall's strong comeback is an especially important and bearish indicator of U.S. industry's global competitiveness, since mainstream economic theory teaches that trade flows are the means by which market forces create the optimal global division of labor.  In other words, the countries that trade a given product most successfully are those that eventually will produce it most successfully, and vice versa.

The China story told by these data also clash with that told in the December Atlantic articles.  As fast as imports worldwide have been grabbing share of U.S. advanced manufactures' markets, the inroads being made by imports from China have been much faster.  And although these shipments started from a considerably lower base, they supplied more than six percent of all American purchases of these capital- and technology-intensive products last year.

As robustly as the overall U.S. manufacturing trade deficit has risen recently, the China deficit has recovered just as dramatically, and from a much shallower trough.  In fact, so far this year, the manufacturing trade gap with China has increased more four times faster than America's global trade gap.

Signs of American industry's weakness also emerge from comparing its growth rate with those of leading competitor countries.  Last week, the U.S. Labor Department reported that between 2009 and 2011, American manufacturing output expanded more slowly than industry in Germany, Sweden, Korea, Taiwan, and Singapore, and only slightly faster than manufacturing in Japan, whose industry is widely described as hemorrhaging competitiveness.  These years of course cover the period when the U.S. manufacturing renaissance allegedly was well underway.

Data for China were not provided in this survey of high-income countries.  Yet the consulting firm IHS reported this earlier year that in 2010 and 2011, America's share of world industrial output not only has fallen behind not only China's, but has been falling faster than that of the 27-nation European Union, whose economic problems are by now all too well known.

Other major problems with the articles revolve around insourcing claims themselves.  Do the new investments in U.S. manufacturing mean that outsourcing has stopped or has slowed significantly?  None of this essential context is presented.  But last July, a major Bloomberg News investigation spotlighted a study reporting that continuing outsourcing neglected by the news media has entirely offset the job creation credited to insourcing.

In addition, improved American competitiveness is far from the only reason for insourcing.  Scratch an instance of reshored manufacturing, and significant federal, state, and local government subsidies can often be found beneath the surface.  For example, according to GE official Kim Freeman, the $800 million Louisville appliance investment detailed in "The Insourcing Boom" was keyed by $100 million in such supports.  Over the last year, two New York Times articles have made clear that subsidies have been "increasingly important" spurs to new and retained domestic manufacturing investments.

Using taxpayer dollars to pay manufacturing companies to move or stay may make perfect sense in many cases.  And certainly most of America's major trade competitors engage in such practices pervasively.  But relying substantially on government inducements is likely a losing proposition for domestic manufacturing advocates.  After all, industrial rivals like China, Germany, and Japan are financially strong.  The United States remains saddled with enormous debts - many owed to these very countries, and is unlikely to win a worldwide subsidy competition.

American manufacturing still retains many strengths.  Some of it, moreover, may boast considerable growth potential.  But no one should underestimate the continuing weaknesses and challenges made clear by the most comprehensive, most detailed data.  Without presenting this readily available big-picture evidence, accurately describing domestic manufacturing's present circumstances and realistically assessing its prospects simply is not possible.

Alan Tonelson is a Research Fellow at the U.S. Business and Industry Council, which represents nearly 2,000 small and medium-sized domestic U.S. manufacturers.  The author of The Race to the Bottom (Westview Press, 2002), Tonelson contributes to the Council's AmericanEconomicAlert.org website, and can be followed on Twitter @AlanTonelson and on Facebook at Tonelsonontheeconomy. 

The author is Robert Kuttner, of The American Prospect. The first item is an appreciation of Albert O. Hirschman, whose death at age 97 I mentioned briefly two days ago. 

To the extent that Hirschman is widely known today, it is mainly though a small book with a puzzling title, Exit, Voice, and Loyalty, written in 1970. The book has a huge following among social scientists, mainly outside of Hirschman's own profession of economics. His basic insight is elegant, simple, and original. Citizens and consumers have two basic ways of responding when they find anything from a product, politician, neighbor, or nation unsatisfactory. They can vote with their feet (exit) or stick around and provide constructive feedback (voice).

Though orthodox economics emphasizes exit--consumers shopping around, shareholders selling stocks, workers pursuing different jobs, emigrants seeking new shores, Hirschman was partial to Voice. It was Voice that made possible civil society, Voice that made business enterprises more than a collection of spot transactions, Voice that offered useful information. And to complete the trilogy of his title, it was voice that engendered reciprocity and Loyalty.

The small book virtually revived the field of political economy.... 

I can't resist one more quote. See if you can guess why I found this part cautionary / instructive:

When I [Kuttner] first visited him at his office at Princeton's Institute for Advanced Studies, Hirschman was already in his seventies. He gestured to piles and piles of letters, papers, manuscripts and books that had been sent by students, colleagues and admirers. "I could spend the rest of my life," he said plaintively, "administering my past life." But he found time both to engage with his public and to keep producing new, important work.

There is lots more in this elegant appreciation, which very much more reading. Also, I've learned of a full-scale biography of Hirschman coming from the Princeton University Press early next year. It's by Jeremy Adelman, it's called Worldly Philosopher, and its cover is shown above. 

[S]purred by the tailwind of a re-election victory and the realization that public opinion is on his side, President Obama has displayed a new toughness in his budget battle. He has declared that he won't negotiate against himself, and the strategy is working. But the White House is still stuck in don't-make-trouble mode on the crucial issue of judicial appointments, where the pace of nominations is only now catching up with that of Obama's predecessors and the strategy for avoiding partisan confrontation gives Republicans something close to a veto over who is nominated.

The slow pace of nominations combined with Republican obstruction to create a huge backlog. There are now more than 100 vacancies on the federal bench, out of some 856 federal district and appellate judges, far more than on the day Obama took office. The flagship Court of Appeals for the DC Circuit has 3 vacancies out of 11 judges, leaving that court with a Republican majority. During Obama's first term, total judicial vacancies increased by 51 percent. During the first terms of Clinton and Bush, they declined by 65 and 34 percent respectively.

This also is worth reading, and I very much hope that the audience includes people in the White House.

Boy, am I glad that the current issue of our magazine came out a week ago, rather than a week or two from now. Today we hear that:

• Apple is planning to open at least one Mac production line in America, and
• Foxconn will be expanding operations in the U.S.
  

In case you might possibly want a little context on developments like these, I give you Charles Fishman's "The Insourcing Boom," about the factors that a company like Apple -- or GE, which Fishman examines at length -- weighs in deciding whether to shift assembly back to a high-wage home-market company. And also my "Mr. China Comes to America," about some of the deliberations going on within Foxconn as it considers how to handle a younger, more sophisticated, more demanding, overall less compliant work force in China -- while also responding to ever-faster cycle times in product development, which make it more attractive to have designers, engineers, and production workers located close together and close to their markets.

Why do I mention this? Because the point of a magazine like ours is to give you advance warning of, and context for, items you're going to see playing themselves out in the news; and this turns out to be a particularly tidy example.

Also, the Bloomberg story quotes Louis Woo of Foxconn, who also plays a featured role in my story. Tim Culpan of Bloomberg quotes Woo thus:

"Supply chain is one of the big challenges for U.S. expansion," Woo said. "In addition, any manufacturing we take back to the U.S. needs to leverage high-value engineering talent there in comparison to the low-cost labor of China."

There is a lot about America's job-creation problems -- and potential -- in those two sentences. For a guide to what lies behind them, I gently re-direct your consideration to the December issue of our magazine.

This past summer I mentioned the D.C. installment of the ongoing Uber-vs.-the-world battle. In the following months, as the Atlantic Wire reported, Uber (the on-demand, relatively expensive, smartphone-centric car service) has run afoul of taxicab regulators and existing taxi industries just about everywhere.

But yesterday, amazingly enough, a resolution to the hostilities appears to have been struck in one jurisdiction: Washington, D.C.! The exclamation point and related "amazingly" are because our beleaguered local D.C. government often lags rather than leads in this sort of agile adaptation to the new business and technology realities.

The CEO of Uber, who was previously on the warpath against the city and its regulators, announces the good news here, on the company's site. The main elements of the new law, as he reports them, are these:

• It explicitly defines a separate class of for-hire vehicles, sedans, that operate through digital dispatch and charge by time and distance.
• It creates a single operator license for taxis, sedans and limousines and requires the DC Taxi Commission to actually issue licenses after a long four-year hiatus.
• It sets new standards for price transparency that will benefit consumers.
• And, above all, it brings regulatory certainty to the vehicle-for-hire marketplace - making it very clear that Uber and its partners, the licensed/regulated sedan companies and drivers, can't be regulated out of existence.

He also credits D.C. Councilwoman Mary Cheh for leading the efforts to strike a deal.

So nyah nyah nyah, all you "real" cities with your fancy freedom-from-Congressional meddling, and your normal systems of self-government, and your other trappings of modern metropolitan life. We in D.C. may still groan under the thumb of an entirely unjust "taxation without representation" scheme, but at least we're solving the Uber question. Congrats to all.

Our new issue is out. (Say it with me: give the best gift of all, a combined print-and-online subscription!). Although I've worked for the magazine for a very long time, I make a point of not looking at in-process versions of the articles or the ever-shifting story lineup but instead reading each new issue as it arrives. That lets me react in real time as other readers would -- and to be freshly enthusiastic (most of the time) rather than jaded about what it contains.

This new issue contains a lot in the freshly enthusiastic category, but if you're looking for a guiltily easy way in, I will suggest James Parker's column on the alarming end-times genius that is Daniel Tosh. Parker's reaction to the tosh.o spectacle is very similar to mine, so naturally I think his column makes good sense. You should look for it on page 36 of the print issue. OK, I'll add a link down below. I'll point out some other stories as the month goes on.

I also have an article in this issue, describing a set of simultaneous complex changes (a) in China's economic, workplace, and social situation, (b) in America's economic, workplace, and social situation, and (c) in the manufacturing, design, and distribution technology that connects the U.S. and the international (especially Chinese). The surprising upshot is that after decades in which "new phase in the globalized economy" essentially meant "new problems for American workers," several of the trends are moving in favor of US-based manufacturing. Charles Fishman has an accompanying article on some of the larger international forces pushing in the same direction.

We've also put up a video, based on photos I've taken in Chinese factories starting six-plus years ago and as recently as last month, plus "real" photos by professional photographers. It gives you a brief look-and-feel introduction to the trends I'm talking about -- and the man, Liam Casey, whom I jokingly gave the title of "Mr. China" in a cover story five years ago and who is directly involved in many of these changes. He's just now opening an office in San Francisco as an aid to US-based manufacturing startups. ("Mr. China," by the way, is a longstanding, informal, usually half-jokey honorific, similar to People magazine's "Sexiest Man Alive" title. Jokes aside, right now Casey is as good a contender as any for the title.) 
 

 

I will work through this as systematically as I can. You can see many past Atlas Shrugged Guy entries here. For some reason, our "categories" function isn't working now, so some are missing, like this and this. But prowl around and you'll get the idea.

1) From the guy himself. I have had an ongoing exchange with our original correspondent -- the one who promised to close down his business, with its $500,000 annual payroll, if Obama won. Just after the election he wrote:

A litany of layoffs today. Entire industries slated for elimination. It is a brave new world you have created. Better to rule in hell than to serve in heaven?

I was used as red meat to the wolves yet my predictions are manifesting right before your eyes.  None are so blind as those who refuse to see...

Then, after some criticism from readers:

I appreciate your posting my thoughts. I am not afraid to stand my position in matters I strongly believe in. It is rare I get a response. I am passionate in my beliefs and relish debate. To bad honest debate is so rare and I did resent a tad being more meat to the wolves than a honest dissenter.

And yesterday:

Perhaps the best analogy i have heard on voting for Obama is like chickens voting for Col. Sanders...

Not that I have anything against chickens...

And today:

It gets better evey day. Do me a favor and give me a heads up when  to pop my corks?

To bad though about Hostess , deep fried Twinkies and Dom are decent together. Sort of like a blend of Elvis and Voltaire? ...

I  confess, I like marshmallows and Rome presents a nice set of glowing embers in which to obtain the perfect brownness and crust.

If I was a Hollywood movie star or perhaps capable of a Manhattan apartment I might enjoy the view. Instead I get to see my life's work dissolve like sugar in a cup of hot water....

Fun stuff, huh?  Perhaps my extremist position of survival and self reliance can produce a repeat burn in effigy?

Cheers, it is a brave new world?

2) For a sampling from the other side, see the installment that begins after the jump.

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While I was enmired earlier today in the world of Atlas Shrugged-ism, my current Atlantic colleague Robert Wright highlighted an article by our former Atlantic colleague Joshua Green that sets out the realities of the upcoming tax and budget negotiations with admirable clarity.

Please print out this passage from Green's Bloomberg Businessweek article so that you can refer to it each time you read a story about Obama's showdown with the Republican forces in the House.

Despite their post-election tough talk, Republican leaders have dealt themselves a lousy hand. Obama can propose a "middle-class tax cut" for the 98 percent of American households earning less than $250,000 a year -- while letting the Bush tax cuts expire for those earning more -- and dare the Republicans to block it. If they do, everyone's taxes will rise on Jan. 1.

It's true that going over the fiscal cliff, as some Democrats believe will happen, would set back the recovery and could eventually cause a recession. But Democratic leaders in Congress believe the public furor would be too intense for Republicans to withstand for long.*

During last year's insanely reckless and unnecessary debt-ceiling showdown, President Obama really did have his back against the wall. Enough members of the super-energized Tea Party contingent were knowingly or ignorantly willing to bring on a technical sovereign-debt default** -- in hostage-drama terms, they were willing to shoot the hostage -- that in the end Obama had to ensure that did not occur.

This time his position is more like Bill Clinton's, during his government-shutdown test of wills with Newt Gingrich's super-energized "Contract With America" contingent in 1995. Clinton said: You're willing to close down everything people rely on, because of your pet theory? Bring it on!*** As Green explains, Obama's position is closer to that today. And, on the heels of the 2012 election results, it is hard to imagine such responsible leadership as the Republican party has inviting an tax increase for everyone, in the name of protecting the over-$250,000 class.
__
* More from Green: "The expiration of those cuts and the automatic reductions set to take effect at year's end -- the so-called fiscal cliff -- mean that Obama and the Democrats can gain a huge source of new revenue by doing nothing at all. Republican priorities are the ones suddenly in peril. The combination of tax increases on the rich, higher capital-gains taxes, and sharp cuts in defense spending have congressional Republicans deeply worried. To mitigate these, they'll have to bargain."

** There are all sorts of debates about whether or when the federal government would actually have "defaulted," how consequential that would have been, etc. The point is: Obama knew that the terrain was unclear enough and the potential risks so great that he couldn't just say, "Ok, I dare you." The upcoming situation is different.

*** As students of the Clinton administration know, the government-shutdown episode, while eventually turning into a political success for Clinton, also led to his biggest self-induced near-disaster, since it was then that he came across one young intern on his staff.

It is impossible to know what to notice or be upset about any more. So I'll just follow a little thread I happen to be familiar with.

- As mentioned two days ago, the Hawker Beechcraft company, based in Wichita, has filed for bankruptcy and is loaded up with debt after its takeover by Goldman Sachs / Onex. Thematic picture: Hawker Beechcraft jet that I saw for sale in Hong Kong last year, just before a group of eager Chinese customers stepped on board.

- A Chinese firm, Superior Aircraft of Beijing, is applying to spend $1.79 billion to buy the company -- maker of Hawker jets and the familiar Beech Bonanza, Baron, and King Air airplanes.

- Former Beechcraft employees say that part of the deal may be shedding pension obligations to workers in Wichita and elsewhere, or fobbing them onto the government's Pension Benefits Guaranty Corporation.

- BUT FORTUNATELY the deal will apparently include $5.3 million in bonuses for nine Hawker Beechcraft executives. At least according to LeveragedLoan.com. Great.

As I have argued at full book length, China's ambitions in this field offer a revealing look into the nature, strengths, and weaknesses of its system. The same is unfortunately true of ours. Does this remind you of anything else you're hearing about in the news?

In the past few days several disparate themes have seemed to take on a connected shape. Or maybe I'm just tired. Still, I am thinking of:

• Discussions over the past two weeks about why the world's dominant nation has such a uneven, shaky, and too-often run-down infrastructure;
• Discussions over the past few days about why it's so hard even to call a taxi in the imperial capital of that same dominant nation;
• News early this week that another once-proud stalwart of American advanced-technology manufacturing, now bankrupt, is being taken over by Chinese investors;
• News this week about Mitt Romney's "awkward years" at Bain: the period between 1999 and 2002, when he was theoretically no longer involved in management or decisions at Bain Capital but was still listed as its CEO and as its 100% owner (Part of a 2001 Bain SEC filing below);

"Bain Capital Partners VI, L.P., a Delaware limited partnership ("Bain Partners VI") is the sole general partner of Fund VI and Coinvestment Fund. Bain Capital Investors VI, Inc., a Delaware corporation ("Bain Investors VI"), is the sole general partner of Bain Partners VI. Mr. W. Mitt Romney is the sole shareholder, sole director, Chief Executive Officer and President of Bain Investors VI and thus is the controlling person of Bain Investors VI."

• A corruscatingly wonderful novel I've just finished, Other People's Money by Justin Cartwright (at the recommendation of one of my sons -- having adult children is great), which opens with this quote from John Maynard Keynes in The General Theory: 

"When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done."

With all that as prelude, let's dip into the email bag. There are countless very interesting infrastructure messages I'll get to shortly. But let me start with this one, from a former employee of the Hawker Beechcraft Corporation of Wichita, which is about to be owned by Superior Aircraft of Beijing. I initially presented this story for what it showed about the strengths and weaknesses of China's economy. The reader says we should consider what it shows about America.

Here's the background to his message, which is long but worth reading. In 2007, Goldman Sachs and Onex Corporation formed the Hawker Beechcraft Corporation from aircraft facilities they had bought from Raytheon. The company got very heavily loaded up with debt; it laid off hundreds of workers; two months ago it went into bankruptcy; this week a sale to Chinese purchasers was announced. The reader takes up the story from there:

The pending sale of HBC highlights an interesting situation.  Will the US courts allow the buyer to avoid paying their pension obligations and shift that burden to the American tax payer so the new Chinese company can be more profitable?  Reportedly none of the buyers are willing to fund the shortfall in the pension plan.

Since the original bond holders have already lost their investment and the new hedge funds have spent pennies on the dollar to become the debtors in possession, what will their profits be from this short term investment?  Will their profits be maximized at the expense of the American tax payer by working to shift that burden to the PBGC [Pension Benefit Guaranty Corporation, a federal agency] so that more of the purchase price goes to them?...

Who will watch out for these groups?  Will it be the current management team that wants to negotiate the best and lowest cost overhead so they can look good?  Will it be the current team that more than likely will get some kind of bonus package for engineering the sale, or at least will receive a hefty incentive package linked to future earnings?... The only hope will be a creditors committee of responsible people and a bankruptcy judge that can see through the maneuvers and stand up for the workers, retirees, and the American taxpayer....

If you look at the finances of the company pre recession and put reasonable growth and profit figures as compared to others in the industry, the only way HBC could have survived [after all the debt taken on following the Goldman/Onex takeover] is by Goldman/Onex flipping the company.  They would not have been in a position to make the upcoming debt payments even with a normal economy.  Internally, they did not ever make plans to make those payments. 

If you and I buy a house that way, the banks would say we defrauded them.  The only difference is the people who will take the biggest hit are the employees.  The other investors move on to the next possible home run.  Pre bankruptcy HBC never said that the pensions were a drag on the company.  It was only the debt, as soon as they got rid of that, then came the pensions.  The pension plan was fully funded at the time of the sale in 2007 and was 98% in 2009.... 

Skating on the pension plans and making the American tax payer pay is just not right...The courts and lawyers will just work out a deal that favors the hedge funds and the current management team and leave everyone else in the wake.

More to come.

Update One of the hedge funds to which the over-leveraged Hawker Beechcraft owes money is Sankaty Advisors, a name that may ring a bell. So there could me more than merely a thematic connection among some of the items above.

I mentioned last night (other-side-of-the-Pacific time) my amazement at what appeared to be a deliberate attempt to hobble a new competitor in the District of Columbia's universally unloved current taxicab situation. I am about to load up for the long flight back to DC, where I can learn more about this first hand. For now, some items for extra reading, plus a visual reminder at right of the finest days of DC cab-dom. (I actually loved that movie.)

1) Megan McArdle's article in the May 2012 issue of our magazine on why the taxi system in many cities, most dramatically DC, is so unsatisfactory to all involved, from passengers to drivers to regulators to owners. She also sets out the background the current fight over regulation of Uber, the hip and stylish iPhone-app ride-on-demand service.

2) An update from Carl Franzen on TPM on what happened at the City Council today.

3) Another account of the City Council action from Shani Hilton on the NBC Washington site. It includes among other things this intriguing tidbit, about the requirement that Uber set its equivalent of a flag-drop fee at five times the rate for normal cabs:

The company has objected to the $15 price floor, but Pesante [a spokesperson for the Council member who pushed the bill, Mary Cheh] said that's intended to be more of a ceiling. $15 is already Uber's own minimum fare, and legally setting it as the base rate would mean that Uber can't increase prices later.

If that's so, there must have been something else in the bill that is not apparent at face value, or that I missed by being out of the country. Here is what it said about the flag drop fee for "sedans," the category that applied to Uber: "Sedans would be required to charge a minimum fare of 5 times the drop rate for taxicabs."

If this provision is "intended to be more of a ceiling," I wonder how Cheh was planning to get that intention across. And presumably if Uber jacked up its fees unreasonably, the "ceiling" would be that people would stop using it.

4) A piece by Dave Weigel in Slate that conveys a lot of the snarled racial, regional, and home-rule politics of the taxi controversy. Weigel also underscores the real reason the controversy has touched such a nerve in the DC region:

I've never actually used Uber. Saying that is not saying, "I enjoy D.C. cabs." Nobody says that. Few cabs in this city take credit cards. Many of them give blank paper slips in lieu of receipts, which seems like unofficial discrimination against people who file expense reports. If you've ever arrived at Union Station or Reagan National Airport in the late evening, you'd settle for some of that--if you could find a cab.... I've been rooting for Uber because the D.C.-Maryland-Virginia taxi regime is atrocious, and atrocious service-providers sometimes get scared straight by competition.

In case you missed the point, the subhead on Weigel's item was "How D.C.'s atrocious, corrupt, and outdated taxicab cartel lived to see another day."

After my cab ride in from the airport in DC tomorrow*, I'll look into this some more. Good news for columnists! This is the first story in years where no one could possibly fault you for using the tried-and-true "I was talking to a taxi driver, and he told me..." approach to get at the real news.
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* I am speaking figuratively. Since I'll be arriving at Dulles Airport, I will in fact take a Washington Flyer cab -- a reliable and tightly regulated service that only handles runs to and from Dulles. It's when you arrive at National Airport, or Union Station, that you confront the crazy quilt that is the normal DC taxi system.

[Please see update below.] Here's the headline version of what comes below: As a longtime resident of DC, I am accustomed to misadventures in governance in our "taxation without representation" existence here. But a fight over a new competitor to the District's (often horrible) taxi service offers something I haven't seen in a while. Not routine retail-level corruption, nor skillful top-level favor trading, but instead what appears to be a blatant attempt to legislate favors for one set of interests by hamstringing another. I know, I know, this happens all the time -- but the seeming crudity of this one gets my attention.

For details, see below.
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I've used and liked the car service Uber over the last few months in LA, San Francisco, Seattle, and once in Washington DC. In brief: you use a smartphone (iPhone, Android) app to see which of Uber's fleet of roaming town cars is closest to where you are. You send a pickup order; the closest car comes to an address you specify, or automatically to your GPS location; you tell the driver where you'd like to go; and at the end the fare is billed to your credit card. No fumbling for cash, waiting for change, or working out the right tip, which is understood to be included.

In LA and San Francisco Uber seemed slightly but not cripplingly more expensive than a normal taxi. The payoff, from my point of view, was convenience (I don't care if I have the right change, I don't have to sit on endless hold calling a taxi company) and above all certainty. You see how many minutes away the nearest car is, rather than hoping vaguely that the next vehicle around the corner will be an empty cab.

In DC the gap between Uber fare and regular taxi fare seemed larger, but the convenience gain is greater in this way: In residential DC and its suburbs, cabs don't normally cruise streets off the main avenues. You'd think that phoning for a cab from the main companies -- Yellow, Diamond, Barwood-- would be the answer. Hah! Maybe they'll answer the call, maybe they won't. Once they do, maybe a cab will come, maybe it won't -- and this applies even when you "reserve" a cab, since all that means is that at the assigned time they'll put out a bid to see if anyone is interested. (The exception is the reliable Washington Flyer service, but that's only for trips to Dulles airport, its own occasion for despair.) So if I know that I need a taxi from my house, I have to allow maximum padding time for (a) getting the phone answered and (b) hoping a cab will actually show up. With Uber, by contrast, (a) I don't have to hang indefinitely on the phone, (b) I have faith that the order will go through, and (c) I have a clear idea of just how far away the car is.

But it appears that the DC Council will vote today on a proposal to cripple Uber by ensuring that its minimum fare is five times higher than that for metered taxis, which also rules out a lower-cost hybrid option Uber has just introduced. C'mon!
 
Here is what showed up in an email to customers from Uber's CEO overnight:

On Independence Day, Uber announced a roll out of a lower cost service that we call UberX. A less expensive Uber option on an all-hybrid fleet. We're pretty excited about it and think it's a great idea for cities across the country. What some of you probably noticed is that there was no roll out of this service in the District. That is because, only days earlier, the DC City Council informed us that they intended to pass an amendment to the taxi modernization bill that would make it illegal for Uber to lower its prices or to offer a low cost service in any form.

More info on Uber's site here, plus accounts from Cnet, Techcrunch, and DCist, all supporting the idea that this is outright strongarm protectionism for an objectively undeserving incumbent industry. And a slightly dissenting account from the WaPo. [And background on Uber and teh general market-failures of the taxi business from Megan McArdle in the magazine.] DC councilors, please don't do this!
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Here is language from the legislation being sponsored by Councilmember Mary Cheh, who theoretically represents me:

Addressing Concerns from Uber

• Services such as Uber would be allowed to operate in the District.
• Sedans would be required to charge a minimum fare of 5 times the drop rate for taxicabs.
• Sedans would be required to charge time and distance rates that are greater than those for taxicabs

UPDATE DC Council member Mary Cheh has apparently backed off her bad-idea-to-begin-with measure to require Uber to charge 5x the taxi rate. Good call.

Lots of thoughts rolling in about the ongoing blackout in Washington DC and what it shows us -- about climate change and weather trends, about resiliency on the individual and social levels, about overhead versus underground electric lines, about public vs private utility companies.

In honor of Independence Day, which along with Thanksgiving Day is America's greatest holiday, I'll roll them out in selected form in the next few dispatches. Here's a start.

Underground lines sound great, but they are hellaciously expensive. A reader sends this sobering info:

Dominion Power in Virginia has a write up on recent studies and costs on the Under vs. Above Ground issue.  It can be found here.
[JF note: I step in at this point to quote some eye-opening figures from the study.

"In 2005, a study by the Virginia State Corporation Commission found that overhead-to-underground conversion would have 'tremendous costs' that would make 'a comprehensive statewide effort appear to be unreasonable.'

• The study, conducted in response to a request from the General Assembly, found the cost of placing existing overhead electric, telephone and cable television lines could approach $94 billion. For electric lines alone, the cost was estimated to be $83.3 billion; the conversion cost per mile was approximately $800,000.
• A statewide conversion project would impose an additional yearly financial burden of approximately $3,000 per electric customer, the study warned. 'The costs would be paid ultimately by consumers, either directly or indirectly, in the form of prices, taxes, or utility rates.'
• The project would also cause 'significant disruptions' for customers and 'could take decades to complete,' the SCC study warned." Now, back to the reader's note.] 

As with every other infrastructure issue facing the country, it comes down to the fact that everyone wants to go to heaven, nobody wants to die...

I hope that at some point the country can either come to terms with making the best with what we're willing to pay for, or be willing to pay for how we'd actually like things.  Until then, this stuff will continue.

And they've got their own problems, too. From a reader in Seattle:

I remember from our last megastorm (2006), that everyone was asking Puget Sound Energy why they couldn't bury cables underground (like in Europe, some of us added).
 
The large capital cost is just one reason... But I was struck by the realization that underground isn't a panacea either. The environment is challenging - it's usually wet and contains leached chemicals. Electric current generates heat - duh - and there's nowhere for the heat to go, further stressing the cables. We all notice when a storm knocks out power because it's widespread. Underground failures do happen, just not all at once, and cost more money and disruption to repair.
 
That's what I remember, but here's PSE's take on it. It's written to make them look good, of course, but FWIW.
 
Gathering it all up, the capital cost of underground is more, but the O&M long-term is less, as everybody "knows". But the break-even point? If my math is right, taking the averages, order of 5,000+ years.

Plus, they're hard to repair. From a graduate student in the Southeast:

 A lot of the lines where I grew up in South Florida are underground.  This makes them less likely to suffer wind damage during hurricanes, it's true. 

However, in addition to cost, underground power lines suffer from another problem: repair.  The conduits carrying these linescan become waterlogged (again, especially in South Florida), and when anunderground line fails at a single point, it is much harder to find that point if the line is buried and can't be easily visually inspected.

What are we revealing about our vulnerabilities? This note started out as a standard "those wimpy Washingtonians get all panicked about the weather," but then took a different turn:

It's funny how the past few days have shown, again, the fragility of the US electrical infrastructure and how, again, DC goes bananas whenever some kind of rain, snow, thunder or wind sweeps through the region.  For all the pretensions to global influence and delusions of power, DC apparently will descend into anarchy if the lights and air conditioning don't work for a few days. 

For all our military might, global diplomacy, and high tech innovation, we still can't function without electricity.  If we're not noticing how vulnerable this makes us, potential adversaries certainly are.

The cost of "self-reliance." From a reader who identifies himself as a small-c conservative, and who lives in the Pepco "service" area:

As Pepco becomes less reliable to provide the service that has been provided for decades, people will have to adjust.  People will become a little more self reliant.  However, those efforts and costs will divert resources from other areas and keep us from doing things that currently keep us "busy". 

Despite the honorable intentions of self reliance, this seems like a step back and will make us less wealthy.  The concern I have is this new expectation is just the latest in decades of failing institutions and  decline in standard of living.  Many point to flat screens on the walls of low income families and health care quality compared to our great-great grandparents as signs of improving quality of life, end of discussion.  But that discussion fails to address the things that have been taken away like pensions and now the belief the lights will be on.  Our peace of mind is taken away as those sorts of things slip away from us. 

Those are the things that make this feel like country is in decline to so many, even as they are talked into their own feelings being irrational by the people pointing at the big TVs...

The challenge for our leaders is to build the institutions that deliver what Americans expect, but are sustainable in today's world, even if it means unwinding what's left of our existing institutions.

Watch out for those generators!

My wife and I live in Bowie MD.  We bought a generator 5 years ago and have had several occasions to put it to good use.  Our power is still out after 3 days but we've managed to keep our fridge and freezer running.  We have found that we can get by with shutting it down overnight as well as for a few hours at a time during the day.  It also helps to have a propane grill for cooking and a gas powered water heater...
 
Our next door neighbor, Bill, got a generator after last summer's power outage.  The only trouble was that he only had 5 gallons of gasoline stockpiled (enough for 10 hours) and had trouble finding a working gas station the first day.  We had 15 gallons stockpiled and were able to find an open gas station on the second day.
 
Our friends Janine and Bob had a generator and 35 gallons of gasoline stockpiled.  Unfortunately, their generator malfunctioned and caught fire, which set off their stockpile in the shed, which then exploded and set their house on fire.  They were able to get out with the clothes on their backs and their vehicles.   Their insurance company immediately gave them spending money to tide them over while assessing the damage.
 
So be prepared but be very careful.

Yes, it is imperial decline. From a veteran of Republican politics:

Northern Virginia was hard-hit as well, and my power was out 72 hours (although like you I am a couple of thousand miles away and conflicted over whether I should trade my comfort for being able to save about $400 of food in fridges and freezers).

It really drives home the fact (and your other correspondents have not emphasized this sufficiently) that the US is becoming in many respects a third world country due to misplaced priorities and a shallow libertarianism. It's not just electricity infrastructure, either. Germany is a country that freezes in winter, but you don't see frost-heaved road pavement. Why? They build the roadbeds much deeper. American contractors seem to prefer pie crust roads.

Adjusted for inflation, the US has spent well over $20 trillion on the military since the cold war began. Does anyone think if we had only spent $15 trillion we would be speaking Russian? What about the $1 trillion we squandered on Iraq? Could a portion of that have gone for improved electricity grids, better water filtration (with backup generators - the fact that some water filtration plants can't pump water when the grid goes down is scandalous), better roads, and better infrastructure in general?

We can incarcerate more people than any other country, and we can assassinate people half way around the world with drones, but we can't keep the lights on in the imperial capital. Pathetic.

Happy Fourth of July!

The Atlantic's home page and business channel are featuring an interesting item by Matthew O'Brien on the imbalances and weakening of the Chinese economy.

I recommend the article, but for the record I completely disagree with the way we're presenting it on our site:


China's economy in 2012 has lots of worrisome problems. But it confuses rather than clarifies things to compare it to America's in the subprime-bubble, pre-crash era. Folksy analogy: this is like telling someone, "Gee, you really should watch your weight. Remember how bad it was when your cousin had encephalitis?" Both problems, but not similar problems.

The asset bubble that brought America's and then the world's economies down starting four years ago had everything to do with over-leverage (too much debt) and over-consumption. As I argued in the magazine in 2005.

True enough, there are obvious signs of real-estate and asset bubbles all over China now. And many other worrisome indicators, plus a variety of over-leverage problems. But everything about this situation, and its potential for rippling collapse (which is what the 2006 comparison indicates) is different when we are talking about an economy whose net savings rate is roughly 50 percent of GDP, as is the case for China, versus one whose net savings rate is roughly zero percent of GDP, as was the case for America six years ago. Not to mention the thousand other deep differences in economic structure and performance between China and the United States. (U.S. per capita income roughly seven times as great as China's; China's recent GDP growth rates roughly four times as great as America's, etc.)

Moreover: the government has different tools at its disposal in China. As one proprietary newsletter pointed out just yesterday (emphasis in original):

Importantly for growth preservation, current economic drag is primarily coming from areas over which the government retains broad control. A stamp from the central government could put the Ministry of Railways back to work on the rail, and the NDRC fast-tracked projects will surely begin to buoy macro data in the next couple of months. We still feel the property market is recoverable - more ambivalent enforcement would see some local-level property activity return (as it already has) and a complete reversal of housing policy would likely see capital flood back into the market. Therein lies the problem, though.
It is clearly unwise from a sustainability perspective to pump-prime the economy with easy credit and government investment - authorities remain rightly weary of repeating the mistakes of 2008-2010. The interest rate cut signaled the end to government caution, and the start of a more active macro policy. The 'mini-stimulus' is out, and should lead to better economic data in the second half. But for now, weakness abounds.

"Weakness," yes. Danger, concern, possible dragging of the world into another long slowdown -- yes in all cases. But "2006," "panic," and "scarily" all suggest the risk of another cascading round of Lehman-style collapses, and that is not the sort of danger the Chinese situation now poses. Read the item, but skip the headline.

I mentioned earlier that last night's Daily Show interview with Edward Conard, former managing director of Bain Capital, was important as a particularly stark (and non-self-aware) presentation of a politically significant kind of reasoning.

In the interview Conard took something about America that is important and true, and linked it to an explanation that (in my view) is profoundly destructive and false.

The important and true point is that America remains uniquely favorable as an environment in which the Microsofts, Apples, Googles, and Facebooks of the world continue to arise. Plus the Disneys, the NBAs, the Harvards, the FedExes, and whatever example you choose. Our ability to foster the creative parts of "creative destruction" is fundamental to our prosperity and influence. Therefore America must be very careful to preserve the environment that makes such continued innovation possible.

The destructive and false part was his assertion that the only causal factors worth talking about are tax rates and income share for people at the top of the economic distribution.

I think any fair-minded observation of the world shows that other factors matter more in America's pro-entrepreneurial climate. My list would start with: openness to immigration and outside talent; strong university-based research systems; world's largest domestic market as incubator; rule-of-law and culture of venture capital (as opposed to absolute income share for venture capitalists); supportive "innovation in a garage can lead to glory" concepts and the related ideal of mobility and opportunity; and so on. A lot of my recent writing has been about why China, in particular, will have trouble matching this range of advantages -- and why America will be at risk if we neglect or throw away the pillars of our ongoing wealth.

Moreover: there is no plausible evidence that income inequality like today's is necessary for this creative climate. How could it be, if most of the success stories on Conard's list -- Microsoft, Apple, Google -- in fact got their start when tax rates were higher and income inequality was lower than today's levels? Does any sane person think that Bill Gates and Paul Allen would not have started Microsoft if Gates had thought he would end up with $20-some billion rather than $50-some billion? That Steve Jobs was driven mainly by money? That Sergey Brin and Larry Page would have given up on Google if they thought they'd end up as only minor rather than major billionaires? That Mark Zuckerberg is quitting Facebook because the IPO is making him a lot less rich than he might have hoped?

A reader sent in a note just now that extends the argument, based on viewing the Stewart-Conard exchange. Emphasis added:

It was an excellent interview, and if you could tolerate the long windy trek to the pivotal moments, you realized that Conard has no clothes. But that's the problem.  It took a long windy trek, and even after the pivotal moments were spotlighted and admitted to, he receded into his global "encourage growth, encourage the innovators, don't stifle the innovation" bloviation.

For someone who really wants to do it right; who really cares about the result; who really wants to understand the mechanics and the physics of what's going on, it's so frustrating to hear one side of the argument totally dedicated to unsupported and unsubstantiated assertions. It's a kind of economic creationism:  we can't possible have an economy if we don't totally focus on growth and innovation, to the utter ignorance of sustainability, stability and the survivability of those whose lives don't happen to involve innovation.

The most frustrating thing that Stewart let pass is that every single one of the examples of innovation Conard raised: Google, Microsoft, Apple, Facebook; each and every one of them were started by geeky high school and college students in the garage doing their nerd thing. Nothing Conard mentioned would have affected their desire or ability to have succeeded with their innovation.  His examples of people leaving Google to innovate were examples of people wanting to INVEST in the innovations of others.  Investment capital is different from innovation, and he refused to acknowledge that difference.  The whole argument isn't even built on sand. It's built on nothing...

I have this inescapable feeling that the economic arguments being made on the Right are so ... cynically married to illusions and glib aphorisims ("job creators") that there ought to be a simple, deft and undeniable coup de grace that could be effortlessly and mercifully delivered, puncturing the huge bag of hot air, allowing it to flit off into nothingness.

And unfortunately, I also have this inescapable feeling that the only person on the planet with the skill, artistry and ability to deliver such coup de grace is Karl Rove.

If you didn't see last night's Daily Show interview with Edward Conard, former managing director of Bain Capital, I very highly recommend it. The whole six minutes or so will give you the fullest impression, plus of course the non-televised outtake interviews included online. But if you're pressed, then start at time 2:30 and watch for the next two minutes or so.


The identification with Bain -- from which Conard retired at around age 50 -- is more than a coincidental connection to Mitt Romney. Conard also has given $1 million to a pro-Romney super PAC.

"It's pretty nice the way it is" got my attention, among other lines. But judge for yourself.

Numbers from the Bureau of Labor Statistics, graph from Center on Budget and Policy Priorities.

Some day people will look back in puzzlement at the prevailing U.S. mood of 2011, when in the face of the biggest job-loss collapse in two generations the prevailing rhetoric from Democrats and Republicans alike emphasized the need to cut public spending, now. (And, yes, it should have been seen as puzzling and self-destructive at the time.)

Much as we now look back in puzzlement at the prevailing U.S. rhetoric of 2002, with its gung-ho emphasis on the need to invade Iraq now. And the rhetoric of 2012, going on around us, with its off-hand discussion of the need to attack Iran any day now. Good for the new chairman of the Joint Chiefs of Staff, Gen. Martin Dempsey, for saying in public what National Security Advisor Tom Donilon has apparently been saying in private on his trip to Israel: that bombing Iran is in fact a risky, bad, and self-defeating idea, and that the Netanyahu team should not be under the illusion that the U.S. would welcome their doing so.

Austerity measures, in the middle of a collapsing private economy, make things worse, not better. This observation would be akin to "gravity pulls you down, not up" except that so many people seemed not to remember or believe it last year. (Viz: the whole debt ceiling train-wreck.)

Here's a visual aid, in keeping with repeated posts that the Atlantic's Derek Thompson has been doing on the subject. It comes from the Rockefeller Institute, which has documented trends in employment over the past few years. These lines show the changes in public and private employment since the collapse that began four years ago: