Data show Car Industry does just well without Donald Trump’s Advice.

As Donald Trump raises political sympathy by using rhetoric against Ford Company, the Auto Industry’s output jumped 10.6 percent in July 2015. Mr. Trump’s remarks in Michigan, on July 12th 2015, questioned Ford Company for planning on building a $U2.5 billion dollars assembling plant in Mexico. The Republican Candidate suggested investments should be driven by national sentiments rather than by profits and economic opportunity. Judging by recent data released on Industry Capacity, the car industry seems to be doing business the right way since its index of industry utilization just jumped to 10.6 percent, whereas production elsewhere in manufacturing increased only by 0.1 percent in July 2015.

By Catherine De Las Salas. August 2015.

By Catherine De Las Salas. August 2015.

Generally speaking, and for Mr. Trump’s information, the largest increase in industrial output for the month of July of 2015 was seen in consumer goods thanks to production in automotive products. It is hard to believe that the car industry is building a plant that would not make economic sense for the company. In fact, Mr. Trump seems to ignore that the industry is doing so well that it shined among other manufacturing related business. Output in other industries such as Machinery, Aerospace and Miscellaneous Transportation, and Miscellaneous Manufacturing declined by 0.2 percent during the same month. Nonetheless, indexes measuring nondurable goods barely moved up in July. Apparel, Paper, and plastic and rubber products increased 1.0 percent each, while petroleum and textile products actually showed losses. So, clearly Mr. Trump is demanding an economic nonsense. It is hard to believe he manages his real estate business with his political standard.

The intersection of politics and economic fosters policy debates in which advocates, such as Mr. Trump, champion their opinions. However, what have remained steady along the years in the United States is the principle of free enterprise which leads the entire economy. Unless Mr. Trump’s remarks were intended to signal the willingness to installing a centralized economy in US, his opinion on Ford Co. business seem more like a statement of Venezuela’s President Nicolas Maduro.

Likewise, “the index for business equipment edged up, as an increase of 3.5 percent for transit equipment was mostly offset by a decrease of 1.5 percent for industrial and other equipment”, reported the US Federal reserve in its monthly publication on Industrial Production and Capacity Utilization. Consumer durable goods index rose by 1.2 percent.

 

Does a worker choose not to work when collecting Social Security?

Campaigns against social security usually claim that Social Security Benefits discourage workers from being employed. Many right wing policy advocates point their fingers at Social Security Benefits as being expensive and further making the labor force lazy – to say the least. In this article I analyze to what extent the number of unemployed people is determined by the number of people collecting Social Security Benefits given out by disability claims. That is, workers’ own disability; workers’ spouse disability; and, workers’ children disability. I use the term workers because, in spite being disable, I assume they are willing to work. Thus, the argument from the right would be that people readily available to work will remain unemployed whenever they can secure an income from the Social Security Administration. Furthermore, workers will do so too before the scenario in which their spouses collect benefits. And third, workers will not work in the case in which social security benefits are being collected for their children. In other words, workers would rather take care of the disable children or spouse and live out of public transfers. Then, the question that possesses this analysis is the following: does a worker choose not to work when collecting some form of Social Security Benefit for her family?

Social Security and Unemployment levels.

Social Security and Unemployment levels. By Catherine De Las Salas (Summer 2015).

The data:

So, by looking at the correlation between number of unemployed people and number of people claiming benefits for the above mentioned three reasons, I am able to capture the “willingness” of disable workers, whom are collecting social security benefits, to work. I take data at the United States county level from the U.S. Social Security Administration database which contains the number of beneficiaries by type of benefit. Also, I take observations pertaining to the number of people claiming benefits for disability reasons. In addition, I take the number of unemployed people at the county level (data from the U.S. Bureau of Labor Statistics). Both data correspond to 2014. The only counties excluded from the sample are the ones at U.S. Virgin Islands. All other counties, and independent cities are included in the sample regression.

One could argue, correctly, some sort of multicollinearity in the data since people collecting benefits usually do not work. However, unemployment statistics from the Bureau of Labor Statistics interestingly count as unemployed persons those who have looked actively for a job during the recent past weeks of the application of the survey. This means that what the unemployment statistics is capturing here is the “willingness” of disable people to work while collecting social security benefits. Given that the answers to BLS Household Survey data have no conditional effect on social security benefits, it is reasonable not expect the survey to be corrupted by the interest of keeping the benefit on the beneficiaries’ end. In other words, in spite of the statistical identity, data can be further interpreted given the nature of the question being asked by BLS Household Survey.

Results:

What I found at the county level is that as the number of disable workers rise by 2.9, the number of unemployed persons do so by one. This is an obvious outcome of the effect that disabilities have on the labor market. So, this should not surprise anyone. However, what turned out to be interesting is the fact that disable people collecting social security benefits are counted as unemployed. This basically means, to some extent, that disable people are “willing” and actively looking for jobs. Although the logic is counterintuitive at first glance, it may reveal something thought-provoking. On one hand, if the person is disable to work, and at the same time collecting social security benefits, such a person should not be looking for a job. But, what the data show is that they actually, and actively, looked for a job despite their condition. Although interpretations have to be carefully examined, either disable persons are cheating the system, or they are just eager to be incorporated to the labor market. Further, given the statistical significance at 95% confidence level for all of the estimated coefficients, there is little room for concluding the variation is due to sampling error only.

Likewise, unemployment levels are affected by workers’ disable spouses. For every increase of roughly 46 people collecting benefits for their spouses, there is a unit increase in the number of unemployed people. Clearly, having a disable spouse does little discouragement for the worker to work. Finally, unemployment levels decrease with increases of disable children. That is, disable children make workers look for jobs eagerly. As the number of disable children increases by 10.5, the number of unemployed people drops by one.

One obvious limitation of the analysis is the type of disability that beneficiaries may have, which certainly mediates the “willingness” of the disable person to work. Nonetheless, some narrow conclusions can be drawn from this regression. First, even though disable people get support from social security, it does not translate necessarily in quitting the labor force, which means neither disabilities, nor public transfers make them lazy. Also, data show that paying for a disable children encourages parents to work.

Regression Output, Social Security Benefits and Unemployment levels

Regression Output, Social Security Benefits and Unemployment levels

 

Do Workers on Unemployment Insurance make Other Workers’ Income Worst?

Economists like to think that wages are set depending upon two basic factors plus a “catchall” variable. The two basic factors are expected price level and unemployment rate. The “catchall” variable stands for all other overlooked factors affecting wage. The way in which the relationship is established by labor theory is that expected price level affects wage determination positively (since the economy has not experienced deflation effect systematically); and, unemployment does it negatively (supposedly, given that workers compete for jobs, employers take advantage of it through price-taking behavior). All other factors affecting wages are assumed to be positive.

Among those all other factors –which are believed to affect positively wage levels- is the Unemployment Insurance benefit. However, depending upon ideology, Unemployment Insurance benefits may be interpreted as affecting wage determination either positively, or affecting wages negatively. On one side, Unemployment Insurance may affect upward wages given that it sums up into the so-called reserve salary, which is the minimum amount of money that makes a person indifferent to the choice between working and not working. In other words, if a person has Unemployment Insurance for any given dollar amount, why would that person work for less that such a figure? The flip side of the coin is that, if Unemployment Insurance contributes to keep people from work, then the unemployment rate goes up due to the UI, thereby pushing down the wages. At first glance, analysts might be tempted to think that those two forces cancel off each other. There is where data becomes important in determining the real breadth of those factors without binding to any ideology.

By Catherine De Las Salas

By Catherine De Las Salas.

By the way, in case you have not noticed it yet, right wing politicians tend to believe that UI pressures upwards wages thereby increasing production costs. Therefore, right wing politicians believe that such a pressure constraints hiring within the United States affecting negatively production and forcing employers to find cheap labor elsewhere overseas.

Managers play a roll either in cutting or increasing wages:

It is important to note that wage laws create downward wage rigidity, which prevents managers to lower nominal salaries. However, and despite of such a rigidity, administrators may manage to cut ‘earnings’ by lowering workloads. Therefore, looking at measures such as hourly wage, or minimum legal wage does not capture the reality of compensation. Instead, looking at ‘earnings’ might give a hint about the variance created by unemployment insurance, unemployment rate and inflation.

The model:

So, the logic goes as follows: wage levels are an outcome of unemployment rate (negatively); plus, unemployment benefits (positively); plus, expected price level (positively). In other words, wage setting gets affected by those three factors since a manager ‘virtually’ would adjust her payroll based on how easy is for her to either hire or fire an employee, and how enthusiastic she is to increase or decrease the employee workload.

Thus, the statistical model would look like the following:

Model

Where y is the dependent variable Average weekly earnings for November 1980 to November 2014; x1 represents Unemployment Rate at its annual average; x2 represents Unemployment Insurance Rate for November’s weeks seasonally adjusted average; x3 stands for inflation rate at its annual average.

Data and method:

Thus, I took data on three variables: Average weekly earnings for the month of November starting from 1980 through 2014. These data, taken from the U.S. Bureau of Labor Statistics (BLS), were adjusted by the average inflation rate of the correspondent year. The second variable is year average inflation rate from 1980 to 2014, taken also from BLS too. I use Inflation Rate as a proxy for the “expected price level”. The third variable is the November’s Unemployment Insurance rate from 1980 to 2014, which was taken from the Unemployment Insurance Division at the U.S. Department of Labor. I chose data on November series given that this month’s Average weekly earnings has the greatest standard deviation among all other months.

Ordinary Least Square Method was used to run the multiple regression.

Results:

Data for the month of November, starting 1980 through 2014, show that Unemployment Insurance Rate could have a negative effect on average weekly earnings for Americans. Apparently, the statistical relation of the data is negative. The actual estimated coefficient for these data points out toward a figure of (+/-) $123 less for U.S. Worker’s average weekly earnings per each percent point increase in Unemployment Insurance Rate. In other words, the greater the share of people collecting Unemployment Insurance, the lower the average weekly earnings of U.S. workers. One limitation of the regression model is that it only captures the employees effect of the variable, the model is not intended to explain costs of employers. In such a case the dependent variable should be some variable capable of capturing employer’s labor costs. The statistical significance for the effect of Unemployment Insurance on November average weekly earnings data is at 95%.

Furthermore, data also show that inflation rate (proxy for “expected price level”) actually works against average weekly earnings. The estimated coefficient for the months of November is (+/-) 28 dollars less for the average paycheck. The statistical significance for the effect of Inflation Rate on November average weekly earnings data is at 95%.

Finally, the Unemployment Rate shows a positive effect on average weekly earnings indicating that, per each percent point increase in Unemployment Rate, average weekly earnings increases by an estimated figure of (+/-) 49 dollars. The statistical significance for the effect of Unemployment Rate on November average weekly earnings data is at 90%.

Regression output table:

Insurance

Temp Workers Program: The Chamber of Commerce and the A.F.L.-C.I.O.’s boost to immigration reform.

Political scientists and economists have widely studied the collective action phenomenon. The focus has been mainly on three major fields: social movements, insurgency and labor unions. A transversal and shared characteristic of these different angles is the influence of the public opinion. Public opinion has played a major role in either supporting or opposing economic aspirations of any kind of interest groups. Furthermore, the current virtual integration of the society -via electronic channels of information- has increased the level of knowledge about collective action organization to the extent that labor unions and interests groups’ agreements get usually under public opinion scrutiny. Thus, public sector personnel managers must first understand the logic of the collective action in order to realize how some categories of employments are affected -specially the hiring process for temporary employees and services. In order to illustrate the interaction between public opinion, public sector personnel managers and labor unions demands, this essay takes a look at the most recent bargaining issue between two large collective action organizations in United States: The Chamber of Commerce and the A.F.L.-C.I.O. on the case of the Guest Worker program in the context of immigration reform. 
The essay concludes that public opinion and high quality information play a major role in labor-related negotiations, regardless of the organization’s private or public nature. The first part of this essay briefly reviews the historical context in which collective action organizations raised and declined in United States. The second section illustrates an example of public opinion pressure on labor negotiations regarding temporary employee hiring. The last section comprises the conclusion. 
The historical context of collective action and labor unions in the United States: 
Labor Unions as organizations are understood by the logic of collective action. Mancur Olson has presented a cogent explanation of why people create associations. In his masterpiece, “The Logic of Collective Action”, the author devoted a whole chapter to the labor union phenomenon. For Olson, “the American labor movement began as a series of small unions with local interests, each independent of the other” (Olson, 1971, page. 66). The author states that, although unions started small, they advanced to national scale between 1897 and 1904 (Olson, 1971). In such period, unions grew from 447,000 to 2,072,000 members. Olson explains such success in terms of coercion. One of the coercive tools the author identified as a major factor was compulsory membership. Following him, compulsory membership allowed union to grow steadily during the first half of the twenty century in United States. Compulsory membership is understood by Olson as the ability “to enforce the rule that nonunion members may not work in a given workplace”. 
Obviously, Olson went further than compulsory membership as a factor for union’s growth, asserting that “in addition to compulsory membership, picket lines, and violence, some unions have also had selective incentives of a positive kind: they have offered non-collective benefits to those who join the union, and denied these benefits to those who do not” (Olson, 1971, page 72).     
Mancur Olson certainly has empirical evidence for his theory. Nonetheless, there are instances in US history that one might think were decisive in fostering union organizations. The Triangle Shirtwaist Factory fire in New York City on March 25, 1911, is a great example of other factors fostering workers’ interest groups formation. It supposedly led to the growth of the International Ladies’ Garment Workers’ Union. It is worth noting that the Triangle Shirtwaist Factory fire in New York was one of the deadliest industrial disasters in the history of the city. Apparently, this fire is one of the US historical events that have persisted in the US collective memory, strengthening a wide support for labor union during the first half of its twenty century.  
The twenty century was kind of a Golden Age for labor unions. During such century collective bargaining and labor unions proved to be highly effective in certain contexts (Lurie, 1961; Ashenfelter, 1971; Ehrenberg, 1973, 1975). Many of the studies and researches made through the 60’s and early 70’s showed the tremendous success of labor unions in negotiating higher wages and benefits. Researches that took samples from cities with population over 25,000 showed a predisposition of these municipalities to provide higher benefits in salaries and wages that range from 12% to 18%. Malvin Luries for instance studied the effect of the presence/absence of a union on the basic wage rate per hour. One of his major findings was that the presence of a union in the workplace may generate an increase of up to 10% in wages (Lurie, 1961). Likewise, Ehrenberg found that the variation might be higher. For him, the increase might reach 18% wage difference in presence of labor union.         
The decline: 
The historical conditions that helped labor movements to rise in United States were certainly different to the actual conditions. Although it is hard to assure that mass media resources were not involved in labor union growth, the scope of the media was certainly limited when comparing to the current availability and stream of information. Nowadays, public opinion gets more involved under the current flow of public and shared information. Therefore, public opinion has come to play a major role in bargaining process when it affects public sector employees. The most recent and significant experience was lived in the state of Wisconsin. There, Governor Scott Walker curbed collective bargaining for public employees. Ohio, New Hampshire, Missouri, Minnesota, Michigan, Main and Indiana have strong anti-union movements that are promoting the so-called right-to-work type of bills (Scott Neuman, NPR News. June 06, 2012). The fact of the matter is that “the number of union members in the public sector has leveled off, and traditional adversarial relationships are giving way to partnerships and alternatives methods of dispute resolutions” (Klingner et al, 2010, pag 355). 
Temporary employees:
Public opinion pressures for more effective agencies have led personnel managers to create and innovate on hiring modalities. Public personnel managers have opted for expanding the agencies’ pay roll by hiring a more effective and flexible temporary employees.  Temporary services allow managers to cope by creating a “labor reserve” for times of increased output demand” at a cheaper cost (Klingner et al. 2010, pag 349). Agencies may save taxpayer dollars in hiring process and benefits that are denied to temp workers. However, the quality of job being performed by temps is certainly lower (Klingner et al. 2010, pag 349). That affects the quality of the service provided, which is also a demand made by public opinion. Finally, the overall agency’s performance gets affected by this way of hiring services because the principal happens to be the temp agency (Klingner et al. 2010, pag 349).
Temp workers in the private sector seem to be equally effective for both the employer and for personnel managers. The most recent case is the Guest Workers program being discussed on the verge of immigration debate. Ashley Parker from the New York Times wrote on March 29 of 2013: “The Chamber of Commerce and the A.F.L.-C.I.O., the nation’s main federation of labor unions, have been in discussions parallel to those of the Senate group, and have already reached a tentative agreement about the size and scope of a temporary guest worker program, which would grant up to 200,000 new visas annually for low-skilled workers”. The editorial board of the same newspaper affirmed on March 31st that “Previous immigration overhauls have died because of the seemingly unbridgeable divide between business groups, which want an abundant flow of cheap workers, and labor unions, which want to protect the jobs and wages of workers already here”. Regardless of the convenience or the policy, the truth of the matter is that labor unions in United States have the capability to halt national level policies for decades. Their bargaining power still has huge influence in national level politics in United States.
Labor Unions might have leverage nowadays, but limitations are imposed to them from public opinion. Besides the reason in labor registration decline mentioned above, public opinion has questioned the core values that bolstered labor union movements once. Not even a high rate of unemployment has made public opinion support current labor unions’ positions. Jason Riley from Wall Street Journal published on March 26 of 2012 the following information: 
“With U.S. unemployment currently above 8% and millions of Americans out of work, a guest-worker program for immigrants might seem like a hard sell. Yet when pollsters at the Tarrance Group asked likely voters about a proposed guest-worker program for agriculture, 70% of respondents expressed support, and 64% said that they would be more likely to vote for a candidate who backed it. Moreover, while support “is strong across the board,” the survey found, “it should be noted that support is also strong among . . . Republicans (74%), ‘hard’ Republicans (75%), very conservative voters (67%), strong Tea Party supporters (71%), and weekly church attendees (73%).”
This type of public information plus the way it spreads through society and mass-media affects traditional practices in public personnel administration. While dealing with labor unions, government officials and personnel managers must consider the role that public opinion may play, as well as the information stakeholders want to share and validate.
Conclusion: 
Public opinion plays a major role not only when government officials deal with bargain issues at the state level, but also when private sector interests groups negotiate policies at the national level. Public personnel managers should derive conclusion not exclusively from the public sector labor union negotiation, but also from the private sector bargaining process. A major conclusion is the realization that all stakeholders must be considered in any negotiation that is expected to succeed, regardless of the sector. 
Particularly, majors and executive branch officials in general should spread good information throughout society to achieve better results in the negotiation table. Sharing information with transparency and accuracy determines public support to negotiation between unions and government officials. However, data and information may be manipulated by one side of the bargain. Biased information may reach public opinion and therefore negotiations might get affected. What is really important then is to have a prior agreement on how the negotiation table will handle information and data resources. A strong agreement on who, what, when and how data is going to be shared will bolster and strengthen both side of the negotiation table. And that may lead to a better understanding and to better agreements.
References:
1.      Klingner, Donald et al. (2010). Public Personnel Management. Context and Strategies. Pearson. New York. 
2.      Olson, Mancur (1971). The logic of the collective action. Harvard University Press. Cambridge. Massachusetts.
3.      Lurie, Melvin. (1961). “The effect of unionization on wages in the transit industry”, Journal of Political Economy, #69.
4.      Ehrenberg, Ronald. (1973). “Municipal government structures, unization, and wages of fire fighters”. Industrial and Labor relations Review,# 27.
5.      Ehrenberg, Ronald and Goldstein, Gerald. (1975). “A model of public sector wage determination”. Journal of Urban Economies. #2.
6.      Ashenfelter, Orley (1971). “The effects of unionization on wages in the public sector: the case of fire fighters”. Industrial and labor relations Review, #24.

Paradox of Leadership: William Lantigua and Vincent A. Cianci.

There is a dichotomy in what one might think is the “Paradox of Leadership” and William Lantigua is the most recent example of it. On one side there is the leaders’ behavior. On the other side there is the followers-voter’ opinion. Leaders have their responsibility to comply with the law and with minimal moral standards (whenever they overlap the law).
Regardless of political orientation, ideological framework or economic preferences, any political system that claims uphold the Rule of Law makes corruption inadmissible at all levels, means and scales of government. The Rule of Law is what builds the basic agreement about what should or what should not be admissible in any society. Everything that complies with the law is political, economic and social acceptable. Anything that does not comply with the law is absolutely unacceptable, even transforming a grimy city into the most appealing city in New England as Vincent Cianci’s case, or reviving Lawrence for immigrants in William Lantigua’s . There is not trade off for leaders, there is only one standard: the law.

The “Paradox of the Leadership” shows up among public opinion. It is right there, in democratic systems, where voters’ opinion derives on either political support or public condemn to corrupt practices. Voters’ opinion is indeed what draws the line and sets the standards for public moral matters. Being the latter different from law issues only when the questioned actions are not explicitly regulated by the law. Whenever a “questionable” issue occurs outside of the legal sphere, it becomes a moral issues. Moral issues are addressed by Voters, legal issues are addressed by judges. Lantigua is running for reelection in Lawrence.

The Case of Vincent A. Cianci represents a good example of that dichotomy. Public opinion forgave Cianci’s actions because of its utter outcomes: Having “transformed Providence from a grimy industrial backwater into the liveliest, most appealing city in New England…” (New York Times, 2002). It is needless to discuss here what a judge ruled in Rhode Island. That was a matter of the Rule of Law, and as such it must remain unquestionable. However, the fact that deserves more attention is that of:  “One woman expressed it in a few words of elegant paradox: ”I wish he’d get away with it.” (New York Times, 2002).

The woman’s statement may reflect two different scenarios: first, the standard of values in politics has become flexible enough to the extend that it is feasible to forgive corruption in order to advance a public agenda. Second, the woman who made the statement is crazy. For the latter scenario there should not be concerns: it is a isolated case. However, for the former scenario, there are consequences: first, there is a public justification for corruption which leads very often to social inequality. Second, there is a misconception of the nature of public resources, which eventually ends up in inefficient and expensive public sector. Third, there is a validation for out-of-the-law means, which often ends up with the lose of public confidence and in some extreme cases political violence. Finally, if the public opinion strongly supports the idea of a moral shift, which is similar to say, it is OK to forgive corruption in order to advance a public agenda, then moral political institutions must have evolved so much and to the extend that a new frame of values and standards must replace the “ancient regime”.

If drugs were legal, Pablo Escobar would be a typical outlier. 20 years of his death.


There is a celebrated trend of writing good things about successful people. Due to the innovation of Apple products and its success, Steve Jobs may represent currently the maximum expression of both entrepreneurial leadership and personal biography writings. Values and social opportunities come jointly to place in order to make sense of personal successes. For those of us who live the 21st century, it is more than clear that Modern societies like to celebrate success so that futures generation may build upon such experiences and stories. However, little attention is given to success of those who we condemn. Success in criminal careers also deserves analysis and reproduction of stories in books and documentaries so that they shall not be replicated by new generations. Certainly, Steve Jobs’ experience may shed light onto what needs to be done to achieve technological and economic success, but Pablo Escobar may also shed light onto what is necessary to do in order to avoid violence and delinquency. Pablo Escobar may be considered an outlier from a series of drug smugglers and criminals that had the perfect setting for criminal and economic success.
It is hard to categorize trafficking, assassinations, racketeering, bombing, money laundry and smuggling as successful activities, but Pablo Escobar was certainly an extraordinary person in such set of endeavors. The first aspect that determined Pablo Escobar’s criminal career was having a moral double standard. As a person, Escobar had big ambitions as well as Steve Job may have had. Escobar was as poor as Bill Gates may have been. Compared to famous entrepreneurs, there was probably nothing different in Escobar’s mind that made him a risk-taker type of person.
The difference may reside on the social environment Escobar grew up in and the set of values he was surrounded by. The mindset that was instilled in Escobar was deeply mediated by the cultural setting of Colombia during the 50’s. That decade represents a breakthrough moment for Colombian culture. Since its early years as a Republic, Colombia had strong civil control over people based on religious values. The Republic and the society lived in under a strong agreement sealed by the Catholic Church. Colombia inherited from Spain a deep devotion for Catholicism and Catholic Institutions. Since colonial times, the Catholic Church represented the higher authority in many of the little towns of Colombia. Furthermore, since roughly 1886 the Republic and the Church shared civic, moral and social control over the population. The separation of Church and State took place in Colombia just until the late30’s.
Pablo Escobar was born in 1949 and grew up in such new cultural setting. Pervious to Escobar’s birthday, public schools were administered by the Catholic Church. Honestly, religious-oriented administration worked out well for years in Colombia by instilling moral values into the population and at the same time overseeing young’s people behavior. Somehow, the Church’s moral system helped keep standards that most of the people agreed on. For Pablo Escobar the story was different. For the first time in Colombia’s history during the 40’s and 50’s, the education would be administered by the public sector. Indeed, Escobar’s mother was precisely a teacher at that time with the revolutionary ideals about religious social control. Secularism took place of both Escobar’s education and Escobar’s home.    
Although related, it is unfair to blame parental relationships for adult criminal behavior. What is indeed true is that the Republic at that time had neither means nor experience in dealing with social services like education. Thus, the lack of experience in education policies meant for Colombian young people in the 50’s a significant decrease of education quality. Escobar’s generation was the first in being exposed to the new national education policies. As it is naturally expected, after a long marriage between the Republic and the Church, the State during the 40’s and 50’s wanted deliberatively to take distance from the old methods of learning and teaching that were established by the Catholic Church. That included obviously a shift on moral issues. In almost the same way Protestantism shift away from the religious principles established in Europe during the Renaissance, Colombia did so during the 40’s. However, what Colombia missed was the spiritual leadership of Martin Lutero, Jan Hus and Jean Calvino. What remained in Colombia after the Church left the education system was chaos and freedom to believe without any sort of spiritual or civic orientation.
That was Escobar’s choice. Escobar was barely taught of difference between good and bad. His moral standard was up to him. For him, there was neither authority nor raw models to follow. Therefore, Escobar’s moral standard shaped his ambitions and stirred his life into a criminal success.
 With no moral principles, it is very likely that Escobar wanted to be successful as much as Alphonse Gabriel Capone probably did. For some reason both of them share similar experiences with the Catholic Church. Both families “abandoned” somehow the creed and its moral standards. Once they grew up in such lack of faith and civil roots, both Escobar and Capone, faced similar opportunities for criminal careers. The window that opened to Escobar’s criminal enterprise was the lack of state control of delinquency. The Police organization that patrolled Colombia during the 70’s was not professional; it was concerned of political matters rather than crime.
During the 70’s Colombia’s economic priorities were established around coffee crops that were to be exported to United States. Exports to the United States were the opportunity that a new entrepreneur without moral standards gazed in the horizon. Escobar understood the economic profits of exports and the chance to do so without any type of judicial risk. There was not state police that may deter him from doing business. Likewise, there was a big market eager to make life more “exiting’. The market that allured Escobar’s ingenuity was shaped by an American generation that wanted to be free from many social pressures. The Music Festival of Woodstock in 1969 and the use of the birth Control Pills are just two examples of a gateway leading toward uncontrolled social behavior. Escobar understood better than anyone else the demand for drugs in the United States, and also understood the advantage of producing cocaine in the isolated country side of Colombia.  
Pablo Escobar could have been better known for other kind of business. Let pretend for a moment that we do not know what kind of business he managed. Furthermore, pretend drugs are legally accepted around the world. Then everybody will have to admit that Pablo Escobar was an extraordinary merchant who knew how to lower the cost of shipping products toward American shores. Escobar was the kind of person who better understood American taste and demand. The industrialization of the product was also refined by his ingenuity. The quality of the product was raised to the top. Processes of production, logistical chains were brilliantly organized. Management of personnel went up to the extent of feudal loyalty, and made the Cartel de Medellin an extraordinary organization for doing businesses. The profits derived from its activities gave the Cartel de Medellin worldwide recognition. A brand was created and administered as one of the most regarded brands in the world. There was only one thing that never fitted either in the rest of the society and in history: legality of drugs. Otherwise, this story would be one of an authentic outlier.      

“The People’s Money. How voters will balance the budget and eliminate federal debt"

 

Rasmussen, Scott (2012). “The People’s Money”. Threshold Editions. New York.
 
Since 1835 when Alexis De Tocqueville published Democracy in America, United States’ political system has been worldwide perceived as a key part that contributes to its economic success. Democratic political Institutions such as the so-called “check-and-balance” and liberal economic ideas such as “free market” are said to be the major strengths of America’s Society. Between those two sets of political and economic values, is the idea that having democratically institutionalized procedures for taking decisions represents the core value of the American System. However, since the beginning of the “Great Recession” such idea has been under fire from all fronts of the ideological spectrum. One of the critiques comes from the pollster Scott Rasmussen. In his book “The People’s money” Rasmussen uses his polling experience to bolster the argument that the “Political Class” has failed to fix US Budget Deficit and that by going through real democratic institutions US public finances will be balanced. Likewise, if public finances are not balanced yet, it is because voters are always ahead of politicians. In other words: the current budget deficit crisis is an issue of the Democracy in Americainstead of just financial adjustments.
The first step Rasmussen takes to support his argument is to categorize American Budget Crisis as important as the Civil Right Movement, the US Independence or the Women’s right to vote. He feels US Budget Deficit represents one of the biggest challenges of American history. By placing Budget Deficit up to the top of the political priorities (and historical challenges), Scott Rasmussen’s thesis claims that the solution resides on the “People”, as other crisis did in previous challenges. For him, Budget deficit crisis should be addressed –and will be addressed-the way the Independence, the women’s and civil right were addressed.
Now, if the “people” could make Budget decision directly, Rasmussen finds that the “people” would support eventually a series of Budget cuts. Broadly speaking, those cuts would be at the defense sector, social security, foreign aid, ground transportation so on and so forth. It is important to acknowledge that any voter would certainly be able to cut as much as he considers it is necessary. So would Rasmussen. Nonetheless, Budgetary Cuts are the direct outcome of budgetary increases which were made upon the time for some reasons that might still be part of the political agenda. A brief example is the defense proposal. Rasmussen finds that among the “people”  “75% sees vital US Interest as only the reason for committing Military forces to overseas action”, or “just 11% say US should be world’s policeman” (Rasmussen, 2012. P 61). However Rasmussen forgets that US Military spending increased with its rise as a global powerful player, just to mention one example. There was a growing sense during the fifties and sixties that the world was an insecure neighborhood for the richest guys on earth. It would be feasible to fallow Rasmussen’s conclusion, if and only if, such condition is no longer in place: either US is not the richest guy on earth or the neighborhood is not dangerous.
In the bottom, Rasmussen’s argument does not go further than what political scientists have come to call “Crisis of the Representative Democracy”. For the Author, the basic failure that has brought US to this point is that there exists a disconnection between Washington and what he calls “the People”. It is his understanding that politicians in Washington do not hear or do not want to hear the People’s willingness. Rasmussen bolsters his view by assuring that “American voters have, for the last four or five decades, consistently elected candidates who promised to reduce government taxes and spending” (Rasmussen. 2012 P. 259).Consequently, elected officials in Washington have only cheated on the political agenda. Now, the crisis of the representative democracy entails almost the same argument. In that framework there is not dialogue between leaders and voters and voters do not recognize elected officials as legitimize source of political solutions. In other words: no body speaks for anybody. Rasmussen’s argument supposes that current elected officials do not speak for the people they say they represent.
Despite the fact that Rasmussen points toward a real problem in every democratic system, he also incurs in the same fallacy. The way Rasmussen explains his argument would make any voter think the following questions: who happens to be the “people”, who is Rasmussen speaking for? Why he thinks “the people” he sees has the “right” solution for the Budget Crisis? Those are the same questions that led the democracy to its current representative crisis. Obviously, Rasmussen protects himself by citing its multiples reports and statistically valid criteria. However, votes that elect politicians in a democracy are way more valid than just statistically.
Finally, Rasmussen point out that going too much into details makes people lose the real perspective of the problem and confuses voters, especially, when it comes to the terminology. Going into Deficit details with sophisticated and intricate language is a powerful tool for discouraging voters away from the debate. For the author, it is important to keep the debate in simple terms so that everybody can see the forest instead of just some trees. It is certainly a good approach. However there is always the risk of too much simplification.
Considering Rasmussen’s background makes his thesis hard to swallow. Polls and Pollsters lead officials to govern by the public opinion instead of by the law. It makes the democracy lose all its historical gains, and yes, including entitlements. Maybe in the future it will be possible to equalize polling with elections in order to see who holds the “right” solution, but in the meantime let elections and elected official make the decisions. That is the way the Rule of Law was meant to be.

News analysis: five New England Newspapers on the naturalization issue (Sept. 14th 2010).

News analysis: five New England Newspapers on the naturalization issue (Sept 14th 2010). 
One of the recurrent critiques at the Media and Public policy workshop was the superficiality of media coverage. Students who took the workshop were able to identify the roots and sources of that superficiality problem: media bias; use of euphemisms; political bias and lack of context. The workshop looked at the information as an outcome of not only the reporter who writes stories but also an outcome of the time, the media itself and the actors. In order to further news analysis, this essay compares the coverage of single news by five different newspapers in New England. In the first part we summarize the method used for the comparison which was taken from Teun van Dijk’s discourse analysis theory. In section two of this essay we present our findings regarding the mentioned comparison. And finally we present some conclusions. 
A framework for analyzing news: 
This paper makes a comparison of a single event that took place in Boston Massachusetts. The event was a naturalization ceremony in which more than 5.200 Immigrants became citizens of the United States. The government represented by the secretary of Homeland security granted the new civil status to the immigrants at Red Sox stadium Fenway Park. The coverage of the ceremony was done by information offices, press agencies and local newspapers. The news reports were given by the Office of the Press Secretary at the Department of Homeland Security; The Boston Globe; The Boston Herald; Nashua Telegraph; El Planeta and Associated Press. 
The first step taken in this analysis was a basic association. The subject we are comparing here may be related to a more broadly issue: racism. Teun van Dijk provides a framework for analyzing news in the context of a racially divided society. One might think that Immigration Issues might be related to racism, however, there is certainly not too much evidence we can use to bolster the association. The following graph may help us support our assumption. Graph #1 takes data provided by van Dijk (1988). Generally speaking what researchers found is that ethnic affairs or race affairs are broadly covered as immigration issues. The top one media coverage when it comes to do with race is Immigration news. Therefore –here is our assumption- immigration coverage can be associated to race coverage. 
Graph #1.
pastedGraphic.pdf
Data taken from van Dijk, (1988).
The second step was an attempt to define a method to compare the same news. Because the subject is identical in all of them, differences might be at the details. Van Dijk’s proposal for analyzing news suggests ten aspect of the discourse used to portray racial issues and in this case immigration issues.
  1. The first aspect we should compare is the presentation of the news, which means basically the location, the usage of photos, the size and the type of media text. In this regard we do not have chance to analyze neither location nor size, and the type is the same in all of the sources. Therefore the measure we use here for size is length in words.
  2. In the second place, the method requires analyzing the subject which is the same in all samples. 
  3. Thematic structure comes in third place of the analysis. It basically relates the perspective commonly used by mainstream media on immigrants. For Van Dijk this perspective is understood in terms of problems caused by immigrants due to the racial division. We certainly do not expect our sample to show the same outcome as in van Dijk’s research. 
  4. The forth aspect to compare are the Headlines and its key words. The words that best summarize the headline and at the same time best summarize the news. 
  5. Fifth, who is speaking is a key aspect in determining the ideological orientation of the news. 
  6. The category “doubt” refers to an attempt to build a “them-group” made by the media. It basically means a disfranchisement strategy made from the media in order to portray immigrants as non-part of the mainstream culture. 
  7. Evaluation and description are aspects that require attention for the adjectives that better describe people at news. It gives you necessarily a hint about the political and moral stand of the newspaper. 
  8. Finally, Explanation is what lies beneath the text. The reason behind the event and behind the editorial decision to publish the content in the newspaper.
We take these ten categories of analysis and cross them through the five sources of information. The next section summarizes the findings.   
The comparison: 
Table # 1 summarizes briefly the comparison among the newspapers. We must acknowledge that reaching solid conclusion from that sample size is always risky. From these five articles we do not have enough evidence to draw generalizations. However, there is a couple of insight that can be pointed out.
Table #1. 
News comparative analysis: Naturalization ceremony at Fenway Park.  
(September 14th, 2010).
Presentation: use of photos.
Size
Subject
Thematic Structure
Headline
Who is speaking. Self-determination
Doubt – them-group.
Evaluation
Description
Explanation
Homeland security
No photo.
318 words
Immigration
They are Solution for
Key word: Naturalization
Democrat.
No quotes.
Key Adjective: Newest.
Assimilation.
Immigrants contribute to U.S.
Boston Globe
Video.
845 words
Immigration
They take Advantage of 
Key word: become.
Progressive institution. 
Three quotations from participant
Key adjective: Professional background
Them-group.
Political reasons.
Boston Herald
Three photos picturing Faces and American Flags.
Roughly 115
Immigration
They take advantage of
Key word: newest team.
Independent
One quotation.
Key adjective: professional background
Them-group. 
Not easy to identify.
Nashua Telegraph / AP
No photo.
384 words
Immigration
Political motivations
Key word: sworn in.
Conservative
Two quotations
N/A.
Them-group.
Political reasons: “I am ready to vote”.
El Planeta
One photo picturing one face and an American flag.
445 words
Immigration
Political motivations
Translation
Inmigrantes
Two quotations
N/A.
Them-group.
Political reasons: “I am ready to vote”.
  1. Presentation:
The use of pictures in the articles is restricted to three of them. The Boston Globe is the only one that had video. All images have the same theme: Latino faces and the American Flag. These articles reflect a growing association between immigration and Latino Communities, which is easy to demonstrate demographically. In this case the demographic reality is portrayed in the media. On the other hand, the fact that articles at Nashua Telegraph and Homeland Security Press Office may not lead this analysis to have a political interpretation. By not including photo in its articles, this essay cannot conclude anti-immigration editorial policy, at least in the case of Nashua Telegraph. 
  1. Size: 
Organized by story length the ranking looks like the following table: 
Table #2.
Rank
Newspaper
Length
1
Boston Globe
845 words
2
El Planeta
445 words
3
Nashua Telegraph
384 words
4
Homeland Security
318 words
5
Boston Herald
115
At first glance the ranking would describe editorial inclination and editorial preferences as follow: Boston Globe would have an editorial policy in which immigration policies are more important than it seems to be at El Planeta. However, it is evident that by just counting the words in one article such conclusion cannot be accepted. Naturally, El Planeta would be the most interested media in cover such news. Nonetheless, El Planeta article is a reproduction of Associated Press, which means El Planeta did not have a reporter on site. If one associates these two facts may conclude that it might be a matter of technical and staff resources. 
  1. Thematic structure: 
Although thematic structure is related to the subject, there is a substantial difference that has to do with the way news actors are portrayed by the media. In our articles it is possible to identify at least three big arguments, all of them political. Immigrants portrayed as solution, as free riders and subjects of political maneuvers. Boston Herald and the Boston Globe somehow show immigrant population as a group that is taking advantage of established benefits of being U.S. citizen. Nashua Telegraph send a message about a political maneuver. So does El Planeta. Homeland Security Press Office  shows a group of national builders and contributors. 
  1. Headline: 
Boston Globe and Boston Herald stress the fact of “new comers”. Their headlines basically reflect their intention of sending a message of “new” social configuration. Homeland Security was very candid in saying it is a naturalization, which involves a natural process. All natural things imply inexorability. Sooner than later this process was going to take place. That is the message from Homeland Security. Nashua Telegraph is less confident and place the event under a promises of oath. El Planeta Headline follow its interest of alluring hispanic readers. 
  1. Who is speaking:
A determinant of style and editorial orientation can be found by identifying the political stand of the newspapers. It requires more than one article to identify the real political stand of a news paper. However, opinion among classmates may help shed this issue. Classmates agree in the classification shown in the graph #1. That classification shows coherence with the rest of the aspects analyzed in this essay. 
  1. Doubt them-group:
The context in which van Dijk places his analysis of immigration is deeply related to discrimination and racism. As long as this essay chose that framework, it is constrained to determine whether or not articles creates an image of others. All articles look at the immigrant population as others by quoting them and editing fragments of their answers. Nonetheless, it is not possible to establish a serious conclusion about racism with this limited sample. Finally, unlike the newspapers, Homeland Security Press Office makes assumption of assimilation.  
  1. Evaluation and Explanation: 
Finally, the comparison shows an interesting balance of information bias. The Boston Globe and The Boston Herald show in their quotes professional well educated immigrants. Both newspapers exhibit immigrants as people able to contribute. By looking at the previous aspects, one might expect ridiculous interviewees. However both newspapers avoid showing immigrants bad facade.      
Bibliography:
Van Dijk, Teun.(1988) News Analysis. Lwarence Erlbaum Associates. New Jersey. http://www.discourses.org/OldBooks/Teun%20A%20van%20Dijk%20-%20News%20Analysis.pdf